The confirmation of the experience pathway legislation has left the profession with an open wound, but the passage of the bill is also only a band-aid fix and offers nothing to attract the next generation of professionals.
The bill was passed by the Senate with bipartisan support on Wednesday morning. Introduced by Minister for Financial Services Stephen Jones when he was in opposition, pre-election in late 2021, the Coalition government introduced a consultation just days after Jones’ announcement.
The first round of consultation showed the disappointment from the part of the advice community that had remained silent during much of the blowback of the introduction of professional standards.
Debate of the proposed pathway dominated discourse in the advice sector at the start of 2022, with both ministers (then Minister for Financial Services Jane Hume along with Jones in opposition) telling an event hosted by Conexus Financial, the publisher of Professional Planner, that the education carve-out wouldn’t water down professionalism in the industry.
But faced with the reality of more than 10,000 advisers leaving the profession after the Hayne royal commission, the government felt intervention was needed to stem the outflow.
That’s not to say there haven’t been flaws with the transition to a profession. The adviser exam held under FASEA wasn’t a smooth process, and specialisations weren’t handled with care, which has led to decimation of the risk advice industry.
The FAAA had tried to mitigate the damage of the profession caused by the carve-out, but when a member survey found 50.9 per cent were in favour of the pathway (with the rest specifically opposed), the association was hampered in its ability to advocate against the pathway without putting half its membership base offside.
However, the level of support for the pathway grew to 70 per cent if both the sunset clause and ethics unit changes were incorporated.
The irony here is that the Financial Planning Association (one of the pre-cursor associations that merged into the FAAA) and the Labor government had been the driving forces behind professionalising the financial advice industry.