This year saw professional standards in financial advice challenged, with legislation cementing the experience pathway into law, and the introduction of “qualified” advisers.

The year began with anticipation high over Quality of Advice Review lead Michelle Levy’s final report, which she presented to government on 16 December with Minister for Financial Services Stephen Jones saving it for his Christmas reading list.

After announcing a consultation process in February, which included a roadshow with this publication to canvass industry views, the minister unveiled his first official QAR response in June, fulfilling much of advisers’ wish list of red-tape reduction: Statements of Advice would be replaced, safe harbour steps abolished, and fee consent standardised.

Along with those wins for advisers came the controversial move to broaden the scope of advice allowed to be given by super funds. The scope was narrower than Levy recommended – she proposed allowing any institution to give advice – but there were still concerns over the quality of advice that would provided and the conflicts of interest in handling product and advice under the same roof again.

There is some rationale to having super funds deliver more advice: funds are already trusted with accumulation and retirement outcomes for members in a heavily regulated industry that includes an obligation to act in the best financial interests of members, and scoped advice needed to be part of that to serve a market that holistic advisers couldn’t.

But describing a tier of advisers who will be held to lower standards of education as “qualified” was a massive slap in the face to those advisers who worked hard to commit to professionalism and its associated standards and requirements. Suggesting that the government’s use of the term “qualified” was probably meant to apply to the advice provided by these new advisers, rather than the standards they adhere to, only confused things even more.

I’ve been fairly pragmatic about the whole QAR process. While many in the advice sector had higher expectations of the reforms in curing many of their personal regulatory beefs, as well as expecting the reforms to happen more quickly than they have, the minister has largely stuck with timeframe that was laid out earlier this year.

Implementing QAR reforms was always going to be complex, even if the review changes were accepted wholesale. As the minister noted early during the process, the Levy report was never a legislative blueprint.

A rocky path

The experience pathway, a pre-election promise announced by Jones in the final weeks of 2021, became a point of frustration for parts of the profession that had previously remained quiet on the sidelines.

The move was a smart political play to mitigate an outflow from the industry of advisers that didn’t want to commit to professionalism. Since the end of the Hayne royal commission, adviser numbers have dropped more than 40 per cent.

It was a move that had further political benefit for Jones, who needed to offer more direct wins to advisers as a sweetener for his plans to give super funds more opportunities in advice.

This isn’t to say the advisers that qualify for the pathway aren’t quality advisers, but the lack of a consensus to commit to fulfilling the bare minimum standards of what constitutes a profession is disappointing.

It hasn’t been easy to argue this point throughout the year, especially since, even though I am degree qualified, I personally work in an industry that has no minimum education standards and a laughable code of conduct. As much as I loathe seeing my HECS debt every financial year, I have no regrets with pursuing tertiary education, and it gave me more than just a box ticked or a means to employment.