The advice industry has an opportunity to respond to the government’s plan to water down education standards after Treasury released a consultation on the proposal in December.

Treasury’s policy paper, Education Standards for Financial Advisers, seeks feedback from stakeholders on the proposal – first broached by Labor’s shadow financial services minister Stephen Jones – to exempt advisers with ten years of experience (in the preceding 12 years) and a clean compliance record from FASEA’s equivalent degree requirement.

The consultation is the first effort from the minister for superannuation, financial services and the digital economy, Jane Hume, to audit settings after taking responsibility for the education and training standards from FASEA.

Under the draft proposal, qualifying advisers would only be required to complete a tertiary level unit on the Code of Ethics in order to continue providing financial advice.

While the proposed carve-out has the potential to slow the tide of experienced advisers leaving the industry and keep more mentors available for younger advisers, some have voiced concerns that the move would be a major step backwards on the industry’s quest to be a considered a profession alongside comparable sectors, and weaken broader consumer trust levels.

The proposed amendment would create a “two-tier system”, Integra Financial Advice’s Deborah Kent told Professional Planner in December, with clients having to make their own enquiries as to whether their adviser is degree-qualified.

The carve-out could also undermine the work done by advisers to complete the equivalent degree requirement. For many, the silver lining to extra time and money spent studying was that they not only bolster their own standing, but also become part of a degree-qualified cohort of professionals.

With no end-date specified in the proposal, the setback to professionalism could also have an extremely long tail. Advisers that qualify for the exemption could theoretically remain in the industry until retirement, which would make a degree-qualified cohort of professionals unlikely for another 25 years or so.

The proposal is not set in stone, however, with the consultation an attempt by the government to leverage Treasury and garner feedback on the plan. Any amendment to the existing legislative instrument is “subject to feedback received” from the consultation, Treasury notes.

Specifically, Treasury is keen to understand what the impact of the proposed carve-out would be on industry and stakeholders, “including the cost to business”, and whether the proposal meets the policy objective of streamlining education standards while balancing recognition of prior experience with the need for an education benchmark.

Further, Treasury wants to know whether the professional year standards for provisional advisers should be amended to require additional study, “to complement the broadening of the relevant fields of study”.

3 comments on “Consultation leaves door ajar on education carve-out”
  1. Avatar
    David Barber

    The time for the dabate on education standards has gone, it is now up to inidividual advisers who want to stay in the industry to get on with their required studies and attain the appropriate certifications. Continued debate and lobbying of government to reduce education standards only devalues the proffession in the eyes of the public.

  2. Avatar
    Jeremy Wright

    This constant debate about professionalism that can only be attained by ignoring and treating with contempt, thousands of hours prior ongoing studying and decades of experience in the REAL world that can never be taught from a theorist, plus this false narrative that Australians will only respect an Adviser who has a bit of paper hanging from their wall, is forgetting and ignoring as usual, the very people all this is aimed at, the Australian public themselves.

    Ask 1 million Australians that are in Business, who would they prefer to get advice from and people whose financial and emotional futures and well being, rely on advice that is based on their Adviser who has either been through everything they are facing or will face in the future, or if they would discount real life experience and focus on the theory based degree qualification as their most important basis to determine who they can call upon when things get tough and advice is the difference between making good or bad decisions that could dramatically affect their lives today and in the future.

    Everyone has an opinion. However an opinion counts for NOTHING if the argument does not take into consideration what the end recipient wants or the end result will actually be.

    Those Advisers who have just finished or are finalising their degree requirements so they could keep their jobs, will feel ripped off and rightly so, however Government policy that determines that tens of thousands of honest, decent, experienced people who have provided great service for decades and who have done substantial prior learning and studies, should now be held as some sort of pariahs who must be driven out of Business because they disagree with false propaganda, is a disgraceful indictment on how this country is behaving and must stop now.

  3. Avatar
    Helen Postle

    For this to have legs, you have to be past preservation age and at least 15 out of 20 years good record, up to date pd points and passed FASEA exam.
    Ethics and behavioural finance are mandatory.

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