With the education pathway consultation closing, both financial services ministers have doubled-down on the proposed degree carve-out, rejecting the notion it is a “watering down” of the industry.
The proposal would allow advisers with 10 years of experience with an unblemished record to remain in the industry without tertiary qualifications, but had received criticism from advisers who saw it as rewarding procrastination and a step-back from professionalism.
Speaking at Conexus Financial’s ‘The Policymakers’ View on Financial Services in 2022’ webcast, the minister for financial services, superannuation and the digital economy, Jane Hume, said advisers who commenced the requirements but now feel aggrieved should not see pursuing education as a waste.
“For those that have done the education requirements… I don’t think you should ever really feel sore about educating yourself and keeping up to date and becoming more professional, so I would hope no one would see that as a wasted opportunity,” Hume said.
The shadow minister for financial services and superannuation, Stephen Jones, said the education carve-out was not a “watering down” of financial advice, but what should have occurred right from the beginning.
“We shouldn’t be booting those people out of the door if they can meet an accredited recognition of prior learning process,” Jones said.
“It means we aren’t wasting limited resources in our tertiary sector, training people to get a piece of paper that proves they know stuff they already know.”
Stemming the bleeding
Appearing on the panel as a guest, AMP chief executive asked both ministers how they would stabilise adviser losses in the industry.
“One of the problems, as I see it, is the uncertainty about what the future looks like for [advisers], in terms of education, continuing professional development, mentoring and the structure of the business,” George added.
Hume said it was not necessary to “stem the bleeding any further” and that adviser numbers would now stablise post the 2021 exam deadline.
“The real question is how do we make sure we can bring that next cohort through, so we have a dynamic industry that is replenishing itself,” Hume said. “There’s a mass exodus of people leaving the industry and we always knew there were going to be people leaving the industry.
“We don’t want to discourage new people from this industry because it’s an important one and it’s not as if you get a lot of school kids saying they want to be an adviser when they grow up.”
Both ministers agreed that allowing those advisers to remain in the industry was a fair compromise that would retain a larger number of advisers in the industry, provide adequate mentorship to new entrants.
It also meant the traditional sales-focused business model for the provision of financial advice had collapsed and wouldn’t return.
“Neither Jane nor I want to go back to the previous model where sales and advice were conflated,” Jones said.