The experience pathway will offer a better transition to professionalism, with the Labor party “100 per cent committed” to enacting changes to the education standard if it scores an election win this month.

Speaking at a webcast hosted by the Financial Planning Association, Jones said the experience pathway proposal is not intended to interrupt the “journey” to professionalism.

“We called for [professionalism] some 10 years ago and are 100 per cent committed to it,” Jones said.

Over 10,000 advisers have left in the industry in the past few years; Jones believes the path to professionalism hasn’t been handled well and a better transition plan is needed.

“There is a need to put in place a transition arrangement to halt the large-scale exit of advisers who are otherwise competent and have a capacity to perform a job that is needed to be done,” he said.

Jones also wanted to clear any ambiguity about the education carve-out being a “rolling 10-year” period, with a specific date chosen from where the 10-year exception period commences.

“10 years seem to be a good rule of thumb for a length of time in the industry,” he said. “We didn’t want to reward bad behaviour so if you have problems on your scorecard then that doesn’t include you.”

Specialisations

Jones also said he was open to recognition of specialisations, noting it was always intended there would be multiple professional verticals in the industry.

“There’s more than one stream in the industry to date and there should be more than one stream in terms of qualifications.”

Jones noted the FPA pushed the issue heavily with him, as well as associations representing stockbrokers and risk advisers.

“There are some obvious areas we can look at for specialisation and recognition of appropriate qualifications. There is a broad base of knowledge that is needed across all the qualifications. That would be the core, but there are specialisations within.”

The FPA has long argued for recognition of specialisations and in its submission on the education standard in February recommended having a framework of specific license authorisations that granted recognition of specialisations through education or experience.

No time-wasting

If Labor is successful on 21 May, Jones said it will waste no time tackling problems it deems appropriate.

“My own instinct on this is if there is an urgent problem then we don’t need a review to tell us what the answer is, let’s solve it. If there are things that need a more deliberative approach, let the review do its job so we don’t need to busy ourselves with making election announcements on these sorts of things.”

With education and professionalism outside the remit of the Quality of Advice Review, Labor will likely deal with it in the second half of 2022.

“Irrespective of what the review comes up with, we’ve announced a transition policy around advice and qualifications so that’s not subject to what the review comes up with,” Jones said. “We’d ask the reviewer to bear that in mind when they’re delivering their recommendations.”

The Coalition government commenced reviews for the experience pathway and Standard 3 of the adviser Code of Ethics but has yet to put a timeline on confirming any changes from the consultations.

One comment on “ALP ‘100 pc committed’ to professionalism”
  1. Avatar
    Jeremy Wright

    In Australia, we have the utopian scenario for Financial Advisers where customers are queuing out the door to become clients, yet are being turned away in vast numbers due to the cost, time and risk now associated with bringing on new clients.

    Higher education is a very important part of being an Adviser.
    So is Experience and Professionalism, yet entrance to the party for highly experienced Advisers with a very good track record, though no current tertiary qualifications, was seen as an embarrassment and those Advisers should be asked to leave, which they did.

    In the Advised Insurance space, the end result has been a disaster and specialist risk Advisers are becoming an endangered specie.

    The question we all need to ask ourselves, is what benefit is it to Australians and Australia if an “ideal,” leads to an entire Industry collapsing and the cost of the Advice and the necessary product, being the Insurance policy that underpins the Advice, increases to unaffordable levels and the quality of the policies decline.

    Australia needs to build towards 25,000 risk Advisers which will reduce all the current problems.

    The current score card shows the exact opposite, where we now have, by some estimates, only 1,200 risk Advisers and thousands of holistic Advisers cutting back on their Insurance work due to the cost, time and risk.
    What is also a huge risk, is that there are virtually zero new Advisers who are looking for a career in the Advised Life Insurance space, so unless we make it easier for people to join, then the required target will NEVER eventuate and the issues of declining New Business premiums and increasing lapses will continue.

    I have said this many times over the years and I still stand by these words, that Insurance Advice MUST be separated from Investment advice and education requirements MUST be specific to what the Adviser does.

    Investment Advice is a Profession that requires high tertiary qualifications and is a must have and want for most Australians.

    Life and Disability Insurance Advice is irrelevant if no product is taken up and falls into the ” too hard basket” for most Australians, hence the need for a sale to be made to make the advice relevant.

    So we get back to the point. Do we watch a vital Industry die because of an ideal, or do we allow some common sense and incentive for new Advisers to want to join and help rebuild what can be a win win position for all Australia.

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