Experience pathway passed
The experience pathway has passed in Parliament today, three months after being introduced.
The pathway was first introduced to the House of Representatives on 14 June and then to Senate on 2 August.
A note in Parliament today (6 September) stated it has now passed both houses.
Minister for Financial Services, Stephen Jones, said: "This will help to address the mess left by the last government which oversaw an industry that lost over 10,000 financial advisers since 2019. Ongoing advice fees also increased by 41 per cent between 2018 and 2021. This left Australians without access to affordable and quality financial advice.
"By better recognising the experience of long‑serving financial advisers, the Government is providing a pathway for experienced advisers to remain in the industry. This means that new entrants will have the benefit of their experience through mentoring and supervision, and more Australians will have access to financial advice."
Having opened for consultation back in April, the experience pathway provides a way for those with 10 years experience or more to continue advising without the need to hold an approved degree.
The pathway is included within the Treasury Laws Amendment (2023 Measures No.3) Bill 2023 which also includes measures for advisers who are registered tax agents and changes to the First Home Super Saver scheme (FHSS).
The summary of the bill states it “remove tertiary education requirements for financial advisers with 10 or more years’ experience and a clean disciplinary record; address certain limitations in the education requirements for new entrants into the financial advice profession and financial advisers who are registered tax agents”.
In July, Jones, described the pathway as "a pragmatic solution which will keep good advisers in the industry".
However, some in the industry were critical that it omits a sunset clause.
During the consultation period that ran until 3 May, the Financial Advice Association of Australia (FAAA) chief executive, Sarah Abood, said: “We believe that this measure should be better targeted to older advisers, with the inclusion of a 10-year sunset clause.
“This would represent an appropriate transition for established, experienced financial advisers and planners with a clean compliance record. Otherwise, we will be in a position whereby planners currently in their 30s could continue to practice indefinitely with no further qualifications required.”
The explanatory memorandum for the bill stated: “Conditional support [of the pathway] was usually caveated with the desire to ensure the inclusion of a ‘sunset’ date to only allow the experienced pathway to be available until a set time in the future.
“The primary justification for this position was to ensure that advisers currently in their 30s and 40s, who qualify for the experienced adviser pathway, were precluded from being able to practise for decades without meeting any further education requirements. Upon analysis of the data, a sunset date is not considered necessary, and it would complicate the legislation."
AUTHOR
Laura Dew
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At long last some common sense that allows stockbrokers with experience continue to provide low cost advice to clients
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How quickly goals change. Wasn't the point of the legislation to raise the standards of financial planners following the Royal Commission into banking and finance? Didn't we want to turn advice from an industry into a profession? For those planners who worked on their professional development, well done. I imagine though seeing this deflates you. Don't let it. And to those lazy folks who sat on their hands and did nothing, you think you've just be rewarded with a free kick. You actually haven't. You've just let the rest of your profession down. You'll be judged poorly for your lack of professional development by all of your peers, who would probably encourage you to still leave the profession.
Too little too late for former advisers like myself. The horse has well and truly bolted.
Another erosion of trust. How can the public trust an industry that continues to prolong the careers of those under-educated advisers who cling to it like old barnacles.
Bloody brilliant! - common sense has prevailed!