You don’t need to be a genius to guess what the media’s reaction will be when the regulator takes action for poor advice, or worse, for the first time against an adviser who has been allowed to remain in the profession based on their experience rather than educational qualifications, and who has not completed any ethics education.

It’s bad enough even when qualified advisers get pinged. But this scenario could take it to the next level: here’s someone the profession could have agreed should be asked simply to meet the same qualifications as everyone else, but didn’t. There will be questions about why the adviser wasn’t held to the same standards and why the profession and, frankly, the government, allowed it to happen.

A proposal for the ASIC Financial Advisers Register to indicate which advisers are in the industry by virtue of attaining formal qualifications and which are there by virtue of longevity is not a bad idea, as might be the idea of requiring advisers to explicitly disclose the same. Consumers have the right to be fully informed about the individual whose services they’re considering buying.

The experience pathway option is only happening because of the number of advisers choosing to leave the industry rather than comply with new education and qualification requirements. A desire to stem the flow of advisers from the industry is understandable. However, grandfathering of experienced but unqualified advisers could lead to some unpleasant consequences.

In any case, as the Minister for Financial Services Stephen Jones has said the education pathway concessions won’t make much of a difference to the accessibility of advice anyway.

It’s only a band-aid solution

Even if grandfathering advisers based on experience rather than qualifications were to succeed as an accessibility measure, it’s still only a band-aid solution and potentially carries some downside risk. A bigger question keeps cropping up: where are significant numbers of new advisers going to come from?

But rather than trying to answer that, let’s instead examine the premise underlying the question, namely, that we need more advisers – specifically, more advisers that look, behave and deliver services the way advisers on the ASIC FAR currently do.

That seems to be the conventional wisdom and the assumption upon which many other conversations in the profession seem to be based. So let’s challenge it, to see if it stacks up.

But let’s be clear here: we’re not arguing that we definitely don’t need more advisers, we’re simply putting forward an alternative view. If the argument that we do need more advisers holds up, then let’s get on with the task of figuring out the solutions.

The idea that we need more advisers is based on the belief that many more people could benefit from financial advice than already receive it. That may be so, but we’ve yet to see evidence of masses of people complaining that they want to see an adviser and are being turned away. To be fair, not having seen the evidence doesn’t mean it doesn’t exist, only that we’ve not seen it. So if it’s out there, let’s see it.

The benefits of financial advice may be real, but if people aren’t actually seeking advice that point is moot. A need for thousands, if not tens of thousands, of new advisers to meet demand therefore might be overstating things.

One of the reasons more people don’t seek advice is that they don’t trust financial advisers; trust would be greater if advisers were held to the same education and professional standards as other professionals. Grandfathering experienced but unqualified advisers into the profession isn’t going to help improve trust.

It’s also true that the kind of advice many people might benefit from isn’t economical to deliver under most current advice business models. New, mostly digital delivery models are emerging that will efficiently serve the less complex advice needs of more people. We don’t necessarily need more formally qualified advisers to deliver this advice.