In submissions to the experience pathway consultation this week, the Financial Advice Association sought to support older advisers while attempting to weaken the pathway, while the stockbroker’s association has sought to defend the draft legislation in its current form.
The Minister for Financial Services Stephen released draft legislation last month with the notable absence of a sunset clause. Submissions closed on Wednesday.
FAAA were among the groups that expressed trepidation over potential issues in the draft legislation but still praised the addition of technical fixes to address issues with new entrants and the tax qualifications for tax agents.
In a media release on Friday, FAAA chief executive Sarah Abood acknowledged the challenging circumstances for older advisers trying to undertake study when retirement may only be years away.
“A significant number of older advisers, who might have left the profession, could now stay for longer – which will be good for them and for their clients, who may have gone unserved in the absence of this measure,” she said, referring to the departure of 12,000 advisers since the Hayne Royal Commission.
To address the dire shortage of qualified advisers, the association continues to back the 10-year sunset clause which would “represent an appropriate transition” for experienced advisers.
“Otherwise, we will be in a position whereby planners currently in their thirties could continue to practice indefinitely with no further qualifications required,” Abood said.
The association conducted another survey specifically for this round of consultation – out of 1,197 respondents it found around 51 per cent of members support the pathway with the rest opposed.
However, support for the pathway grows to 70 per cent if the sunset clause is added and candidates for the carve out are still required to complete an ethics unit.
Abood said much of the opposition to this proposal has been focused “around the fear” that this change will undermine the perception of financial advice as a profession.
“Our message to members is that we are a profession, and your clients acknowledge this,” she said.
“It does us no service with consumers to create a two-tier system, using terminology that makes no sense to them. Many ‘relevant’ providers are also experienced. Many ‘experienced’ providers will also have qualifications. These points were very strongly made to us by members during this consultation.”
She added that for this reason there should not be a distinction between “experienced” and “relevant” providers on the ASIC Financial Adviser Register.
“It is time for us to come together as a profession and ensure consumers can have full confidence in their financial adviser who is registered and licensed to practice,” Abood said.
The FAAA also asked for the addition of those that qualify for the carve-out to still be required to do the ethics subject.
Brokered options
The application of the education standard has been a point of contention for various industry groups including the Stockbrokers and Investment Association, the SMSF Association, and various life insurance advice advocates. They argue the standard never adequately recognised specialisations and forced members to pursue education irrelevant to their work.
Earlier this week the SIAA called for “urgent” implementation of the pathway.
SIAA chief executive Judith Fox said the pathway is important for members because their qualifications are not approved degrees.
“References by certain stakeholders to advisers being ‘salespeople’ with a few hours of RG146 training as a rationale for why experience should not equate to a degree reveal a profound ignorance of the stockbroking and investment advice sector and are a complete furphy,” Fox said.
“Many of our members are advisers with multiple degrees that are not approved, so they are currently required to do additional, unrelated study. Their existing degrees are suited to a profession in investing, yet FASEA deemed them unqualified.”
The Stockbrokers and Financial Advisers Association changed its name to the SIAA last year. CEO Judith Fox told Professional Planner last March the decision was to better reflect the role of members while also knocking the inflexibility of the FASEA regime.
The association argued the current circumstance would be different if FASEA recognised prior learning and an “approach to qualifications suited to the entire financial advice ecosystem”.
“The experienced pathway recognises our members who have tertiary or other relevant qualifications that do not satisfy the existing financial planning-centric parameters mandated by FASEA,” Fox said.
“It also recognises the value of our members’ experience, CPD and training conducted over that time.”
