The Morrison government intends to follow Labor’s lead and give advisers with 10-years of experience and a clean record an exemption from the legislated relevant degree requirement, while also looking to streamline the approved degree paramaters for new entrants.

In a release from financial services minister Jane Hume’s office circulated today, the government also released for consultation draft terms of reference for the Quality of Advice Review scheduled for 2022.

Concerned at the reduction in adviser numbers during the course of the year, the government has signalled its willingness to abandon its hard line on degree qualifications.

“Consistent with the legislation, the minister will simplify the minimum education requirements while ensuring high quality financial advice for consumers, achieving the intention of the FASEA reforms without micro-managing advisers, universities, students and businesses,” the minister’s office stated.

“As part of this streamlining, the Government proposes to recognise the value of on-the-job experience through designating 10 years of experience, a good record and a tertiary level ethics subject as meeting the education requirements for existing financial advisers.”

Both leading parties are now set to conditionally repeal the equivalent degree requirement after the ALP announced its carve-out plan last week. With an election looming, in the pandemic era and with monetary guidance for consumers in high demand, policymakers have elected to swing the pendulum back from tough, bar-raising settings towards looser, more accomodative conditions.

Theoretically, if the youngest adviser in the industry to satisfy degree exemption conditions is now around 40 years old, it will likely be another 25 years or so before all licensed advisers are degree qualified.

For those who believe degree qualification is considered one of the benchmarks of a profession, that goal now sits a generation away.

The government’s consultation will also look at opening up pathways to the industry by broadening the suite of courses and degrees that qualify new entrants in advice.

A policy seeking submissions on the government’s proposed education standards has been released and will remain open from January 4 until the start of February next year.

Review terms set

Further to the announcement on education standards, the government revealed that the Quality of Advice Review will consider how the regulatory framework could better enable to provision of accessible and affordbale advice.

“In particular, the Quality of Advice Review aims to identify opportunities to streamline and simplify regulatory compliance obligations to reduce cost and remove duplication, recognising that costs of compliance by businesses are ultimately borne by consumers.”

Submissions on the draft terms of reference for the Quality of Advice Review will close on February 4, 2022.

4 comments on “Hume to consult on 10-year degree exemption, new entrant changes”
  1. Avatar

    I Agree. I study and read to keep updated and have absolutely no problem with studying to improve my skills, knowledge and to add value to what I can offer my clients, but I do not want to study again just to get another piece of paper.
    I want extensive study present or past to be recognised regardless of its classification. I should be judged on my ability to do the job, not the year I did my study if I have adequately ensured that I have maintained the skills and have a clean compliance record.
    When I started in 1985, I was in the midst of an Accounting Degree which I ceased in order to do the 2 year LUA Advanced Financial Planning Course that covered Investment, Savings, Superannuation, Retirement Planning, Insurance, Taxation, Estate Planning and Centrelink and Veteran Affairs extensively.
    Then it was decided a Diploma was required so I completed DFP 1 to 8 and went on to qualify as a CFP® in 1997. In addition, I have also undergone further studies to be recognised as a Superannuation Specialist, Retirement Income Specialist, SMSF Specialist, Direct Share Specialist, Debt Management Specialist, Salary Packaging Specialist, Insurance Specialist, Aged Care Specialist, Estate Planning Specialist. Furthermore, I generally complete about 200 hours a year of CPD per year to meet the needs of my clients and my requirements as a Certified Financial Planner, SMSF Specialist Advisor and a Tax (financial) adviser.
    I have taken the time to not only do 1-8 twice and to get all of these specialist accreditations to set me above the pack but have also spent numerous hours ensuring that my business is recognised as a CERTIFIED QUALITY ADVICE PRACTICE awarded to the top 5% of Advisers and FPA PROFESSIONAL PRACTICE.
    Over the years I have willingly added numerous accreditations’ to my name to let my clients know that I stand well above the average Adviser but as I head into the twilight years of my career and see out the last 13 years to mark 50 years as a holistic Financial Planner I would be happy to have to put “Experienced but not Degree Qualified” and let anyone who believes a Degree is all that matters be able to say oh you shouldn’t see her. “She is not Degree Qualified”. This will give all those that complete the degree an edge like I thought that the tens of thousands of hours that I put into completing studies and accreditations over 37 years was going to give me.
    For over 35 years I have guided clients to achieve their financial goals through life, legislative and economic changes. I am a proud winner of a National FPA Value of Advice Award, a member of the US MDRT Top of the Table and I am passionate about delivering excellent advice and service that simplifies our clients lives and enables them to live without financial worry.
    I employee a team of 20 to help me, help my clients, all who I have either assisted to learn Financial Planning from scratch or to take their skills to a superior level and all who would provide written testimony that workplace experience and training was of greater value than formal learnings. I am currently supervising a new adviser whilst they undertake a professional year. I help accountants and solicitors work out solutions for complicated clients.
    If FASEA followed the Govt mandate and looked at all past education, CPD, etc then this wouldn’t have been an issue.
    Obviously, I could just retire with my clients in 2026 but who will look after them and lead my team. That is not what I want, nor what my team want or what my clients want, but I also don’t want to do more unnecessary study that adds little value to what I can do for my clients. I have numerous staff who are studying or who have recently completed their Degree. If there is anything in there that they think I don’t know they bring it to my attention.
    If clients still want to see me because of the excellent financial position I have put them or their family in over 3 decades after being informed that I am Experienced but not Degree Qualified, shouldn’t they have a right. Isn’t ‘freedom of choice’ or ‘a fair go’ part of our Australian values.
    And if they don’t properly judge the ability to do the job, not the time the formal study was done if the Adviser has adequately ensured that they maintained the skills, I truly hope that those who have cared little about what the founders of Financial Planning have done to ensure that there are some very good examples of what a difference quality financial planning makes to the lives of their clients; live long enough to regret ignorant words like “if the industry evolves, and further study is required (whether beneficial or just mandated by law) ill just get on with it and do it as I already have once”.
    If I had only repeated my studies once I would have no qualms either, but as an Adviser who wanted to be recognised as leading, I have repeated my studies numerous times. It is now time for my weekends to be spent with family, friends and on ensuring I maintain my health.
    Leanne Bull CFP®

  2. Avatar
    Jeremy Wright

    Professionalism and being a Professional in todays world, in some quarters, carries a mantle that places a person above mere mortals who without degree qualifications, appear to be incapable of ethics, logic and an abiding understanding of the principles of how to conduct oneself.
    The real world and I have had four decades experience working and living in that world, led me on an incredible journey that has involved contact with, working with and in some cases, fighting with some of the most highly qualified and educated Professionals in Australia.
    After 40 years of looking into and delving into the minds and actions of thousands of people I have met along this long road, I can safely say that some of the brightest minds, with ethics that make you proud to be Australian, have come from all walks of life, with little tertiary qualifications, though they hold something much more valuable. Honesty, Integrity, a willingness to listen and learn and an ethos to do the right thing.
    Some of the most degree qualified people I have had the MISFORTUNE to come across and whom many have held prestigious positions, failed these principles.
    Australia and the Western world has become Elitist, where we look down upon people who have not had the opportunities to attain a better education, though have achieved great things through hard work and experience, learned over many years.
    There is something intrinsically wrong when people are being forced to study in areas that have no bearing on the work they do.
    Education Lobbyists who derive their income from self interest promotion, are always going to push their own agenda, even to the detriment of Australians, which has been the case with Advisers who were and still are, being forced out of their livelihoods by these insidious protocols that suck the lifeblood from Taxpayers and Business, based on a false ideology that the Government fell hook line and sinker for their intelligent though flawed logic.
    I totally understand the argument for Professionalism and being a Professional with appropriate qualifications.
    Where I draw a line in the sand, is when experience, honesty, integrity and ethics, is treated with contempt from an Ivory tower ignorance of the real world.
    The Liberal and Labor parties are now seeing the result of Legal and Education lobbying to feather their own nests, which has led to thousands of experienced advisers exiting to the detriment of all.
    Being part of a Profession, comes with more than a piece of paper.
    It comes with an understanding that ALL people should be treated with respect and be able to get on with their work until they prove otherwise.

  3. Avatar

    As a 20 year veteran in this industry, having been through many market upheavals, experienced varied client experiences, government legislation changes and run my own advice business in the process, employing and training staff, I am heartened that the government is looking deeper into this situation. Personally, I feel 10 years is not long enough for an exemption and would prefer 15 years to give a longer exposure to varied client situations and market conditions.
    Personally, I have never had a complaint, had an extremely clean compliance record, have ongoing professional and client referrals and yet by 2026 was looking at having to sell my business or close it down and leave loyal clients high and dry. As I am quite remote and rurally based, there are limited buyers.
    I am definately not against higher education for newcomers as this is an increasingly complex industry, however, it is not all about the technical aspects. Time is required to learn how to relate, coach, educate, be compassionate and understanding of each individual client. The psychological side of the business is also extremely important and a university graduate just does not have those skills. An older adviser can provide the mentoring required.
    My hope is that common sense will prevail and this situation be addressed with us in mind.

  4. Avatar
    David Graham MAppFin CIMA®CFP®

    I am torn. There is a multitude of experienced planners who deserve this concession. Then there is a swathe of advisers who have fought and resisted to preserve a status quo that has entrenched a sales mentality. They do not deserve this concession. You know who you are. We know who you are. Moreover, those that have done the right thing, done the hard yards may feel somewhat undermined by this concession.

    There are better ways to make advice more accessible while still growing the professional status of the industry.

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