MenuThe FAAA has made a submission to the Government on the Experienced Adviser Pathway, supporting the proposal while proposing that this measure be better targeted.
CEO of the FAAA Sarah Abood said, “The FAAA, including its two predecessor bodies (AFA and FPA), has long argued for both high standards and better recognition for advisers’ prior learning and experience. We also acknowledge the challenges for older advisers, approaching their retirement, in undertaking an eight-subject graduate diploma.”
“Implementing an appropriately targeted experienced pathway could help to offset the substantial decline in adviser numbers over recent years (down 45% since 1 January 2019). 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.
“Consistent with our last submission, 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 thirties could continue to practice indefinitely with no further qualifications required.
“In addition, a requirement to complete the Code of Ethics Graduate level subject would ensure that all practicing advisers have a shared understanding and body of knowledge of our legislated code.
“The experienced pathway proposal has divided our profession, and our membership. Our most recent survey showed that 50.9% of members are supportive of a pathway, and 49.1% are opposed. However the level of support would grow to 70% if both the sunset clause and ethics unit changes were incorporated.
“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. Substantial changes have been made in recent years to professionalise financial advice, with a big impact on the many who have invested time and money in completing the additional qualifications required under FASEA.
“Our message to members is that we are a profession, and your clients acknowledge this. It does us no service with consumers to create a 2-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.
“This is why we have also recommended that a distinction between “experienced” and “relevant” providers not be made on the FAR. 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.
“We are keen to see the Government finalise this proposal soon, to enable financial advisers to make decisions about which pathway they will pursue. We trust that this certainty will help many to make the decision to stay within this important profession.
“We strongly support the technical fixes to address issues with new entrants and the tax qualifications for tax agents. Too many students are currently in ‘limbo’, uncertain about whether they qualify because of matters as minor as a change of course code or name. We suggest that these measures should also address complications for existing advisers in meeting the education standard,” Ms Abood said.
