Labor's Stephen Jones

Stephen Jones this week annnounced Labor would repeal legislation mandating equivalent relevant degrees for existing advisers in an election promise designed to sacrifice a small margin of heightened professionalism in favour of increased access to advice.

The shadow minister for financial services and superannuation this week said if voted into power at the next election, Labor would allow advisers with 10 years of experience an exemption from current legislation – brought in during the Kelly O’Dwyer era – requiring them to qualify for the equivalent of a relevant degree.

“If you’ve been working for a decade as a financial adviser with a good record, a Labor government will not ask to you take that bachelor’s degree to keep your qualifications,” Jones said. “We’re going to assume that that ten years plus experience is worth at least a degree.”

While the shadow minister fluffed on the requirement – existing advisers are required to undertake a graduate diploma at most, not a bachelor’s degree – he made clear his intent to pave the way for experienced advisers to remain within, or return to, the industry sans extra training.

“Amongst egregious injuries Scott Morrison has inflicted on your industry, the most painful has to do with professional training,” Jones said. “Requiring financial planners with years, even decades, of experience to complete a bachelor’s degree or lose their licence doesn’t make sense.”

The trade-off

Under the shadow minister’s plan advisers will still be required to pass the exam, abide by the Code of Ethics and fulfill continuing professional development requirements.

The proposal has the potential to stem the tide of experienced advisers exiting the industry and subsequently create more avenues for consumers to access advice, which is sorely needed in the pandemic era. With more advisers in the industry, the pressure on pricing could ease off.

It would also ease concerns about the lack of experienced mentors for young advisers.

The trade off, however, would be that consumers lose the right to trust that every financial adviser is at least educated to bachelor’s degree equivalence. The need for that trust was why the Financial System Inquiry originally recommended the reform.

In a step backwards for standards and the industry’s journey to professionalism, advisers that have been practicing for ten years with only a financial planning diploma would continue providing advice.

Clearing the way

Questions will be asked about why Jones only introduced the policy at this late stage, when many of the older advisers without a degree have already either left the industry or have prepared to do so in the lead up to the January 2026 cut-off date, which was originally set for early 2024.

(The shadow minister has been unafraid to go on a limb with advice policy planks in the past, including his contempt for insurance advice commissions.)

The policy could also irk experienced advisers who have gone to the effort to complete their bridging courses, only to have the requirement dropped for their peers who declined the opportunity.

The methodology behind the 10-year benchmark will also need to be justified as more than arbitrary. Why not 8? Or 12?

According to Jones, the reasoning is less important than “clearing the way” so advisers can “get on with the job”.

“At the end of the day, though, the ‘why’ doesn’t matter,” the shadow minister said. “What matters is getting this issue fixed, getting your industry back on its feet and, most importantly, making sure Australians get that advice.”

5 comments on “ALP looks to wind back advice standards with degree exemption”
  1. Avatar
    Craig Prosser

    One BIG BACKWARDS STEP.
    We want to call ourselves professionals, what other professional does not need to have a Degree or higher?
    Experience is one thing but I can say having 17 years experience that completing a Master Degree, you learn a lot more than experience alone.
    The reason I believe a lot of advisers are up in arms, is they don’t want to do any more work and a most likely worried that they will realize that all their experience hasn’t taught them everything they should know to call themselves professional. If they are so knowledgeable then they should breeze through any course, taking very little time out of their day.
    Who is going to assess whether their experience is good experience or bad? There is still a lot of poor advice out there, I have seen it on many occasions and some has come from experienced advisers.
    Big thumbs down to ALP for suggesting this, just a blatant VOTE GRAB. Remember that ALP was the one that started all this with FOFA, they even were the first pushing for a degree requirement back then.

  2. Avatar
    Anthony Dunn

    The response to trust ,is not the advisers its the behaviour of the bank licensees. They have been allowed to exit the industry with no ramifications, shareholders have paid all there fines and the advisers pay all the compensation for processes they put in place. Did any bank licensee get cancelled?
    In relation to 10 year grandfathering you need to do some factual homework before making comments. A large percentage of advisers left in the industry to do remaining courses most probably have a relevant degree and met all regulatory requirements for the last ten years.eg Accountants such as myself with the diploma in Financial planning.

  3. Avatar
    Justin Daniel

    what’s the update on risk commissions and Labor?

    1. Avatar
      Martin Le Tessier

      Commissions are OK under Labor’s policies

  4. Avatar
    Jeremy Wright

    Stephen Jones has had the courage to admit there has been mistakes made and that urgent remediation is required, which should be applauded.

    Every one admits and acknowledges that the Regulatory framework is too complicated and has become a minefield to work in, which has led to the massive decline of Advisers.
    The degree waiver that recognizes experience, is one of many changes that need to be made to allow Advisers a chance to help Australians with their needs.

    It gets down to the basics of what is it, we as a country want and are prepared to pay for with differing areas of advice and for all Australians to feel secure that the advice provided is fit for purpose.

    In other words, let each client decide what they need help on and make it easier for Advisers to provide that help, without being dragged down with erroneous red tape and legal wording that clients do not understand, will not read and resent having to pay for.

    Costly theory based education that is not fit for purpose, causes increased over heads and must be reduced so that very precious commodity called time, is properly utilised to allow the real world to get on with doing practical work that actually generates something more than a piece of paper.

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