In Australia, both the AFA and the FPA have recommended changes to the financial adviser education standards proposal in their submissions to Government – and neither organisation supports the proposed 10 years of experience in the past 12 years pathway as is currently proposed.
The FPA’s CEO, Sarah Abood, says in a statement outlining its submission that the proposal made in relation to streamlining the education requirements for financial advisers, “…risks the professionalism journey that financial planners have been undertaking over the past decade”.
She says that while experience is an important factor in competence to provide a professional service to a consumer, “…education is also universally identified as a key component of professional competence”.
Meanwhile the AFA’s CEO Phil Anderson says in an update to members discussing his organisation’s submission, that the AFA has “…argued that all advisers should be able to say that they are tertiary qualified, and this could be based upon a four subject Graduate Certificate”.
He says the AFA has sought to balance its views “…on the need for greater recognition of prior learning and experience with a range of other factors including a determination to see financial advice recognised as a profession”.
Anderson says it has “…long argued for greater recognition of prior learning and experience” and that it has put forward a proposal that substantially increases the recognition of prior learning.
The AFA explains that the proposal from the Government comprised two pathways. The Experience pathway, with a threshold of 10 years’ experience as at 1 January 2026, which will impact the bulk of existing advisers and the Qualification pathway which will significantly impact the new entrants into financial advice, which is critical for the future of the profession.
Anderson says the AFA has “…argued that all advisers should be able to say that they are tertiary qualified, and this could be based upon a four subject Graduate Certificate. We have also argued for a graduated approach to the recognition of experience”.
Its key recommendations are:
Abood says in the FPA statement that it’s important to maintain the gains the profession has won and keep the trust of consumers.
“We cannot return to the days when a planner could technically be qualified with only a two-day course, with no time-frame for that to change. For this reason, the FPA does not support the proposed 10 years of experience in the past 12 years pathway as proposed.”
Abood says the association believes this is an insufficient foundation to meet the objectives of raising the minimum education requirements for the financial planning profession, while also continuing to build consumer confidence in the profession.
…an experience pathway … should only be available for those … aged over 55, with at least 15 years’ experience gained in the past 20 years, and be sunset in 10 years’ time…
“If, however, Treasury plans to move forward with an experience pathway, it should only be available for those professionals aged over 55, with at least 15 years’ experience gained in the past 20 years, and be sunset in 10 years’ time.”
She says this approach would “…reduce the potential for discriminatory impact of the current proposal, recognise the experience of longstanding members, and still allow for a profession with all practitioners being tertiary qualified within a reasonable period”.
However, she adds that in order to make tangible changes to education standards that will benefit the profession, “…the existing framework should broadly be retained, however with added flexibility for more experienced financial planners.
“This will help alleviate pressure being felt by experienced, skilled professional financial planners, but maintain the intent of the framework which requires financial planners to be tertiary qualified.
“It also recognises that many practitioners have already invested substantially in education under the current pathways, and that should be recognised and supported.”
Abood says the FPA believes there is also room for a conversation to be had about specialisation and competency frameworks, as part of the upcoming Quality of Advice review.
Member Surveys
As part of preparing a response to the consultation, the FPA again surveyed members to better understand their views on the proposed modifications.
Abood says that importantly, 83% of FPA members have already met, or are on track to meet, the existing education standards “…and a majority of members oppose the proposal made by Treasury in this consultation”.
“For the most part, our membership supports an education framework which includes more recognition of prior learning and experience, which we believe FASEA failed to take into consideration sufficiently as part of their legislated framework,” says Abood.
“FASEA got it wrong with its one size fits all framework. Financial planners have entered with a variety of degrees and prior career experience, and they shouldn’t have to restudy what they already know.”
Click here for a copy of the FPA submission and here for the AFA’s submission.
The AFA submission also included its recent member survey on the education standards. It’s update to members highlighted:
- 75.5% of respondents do not believe that FASEA provided sufficient recognition for prior learning and experience
- 74.7% of respondents support the provision of an increased level of recognition of prior learning and experience
- The level of support for increased recognition of prior learning and experience varies between 47.8% from those who are already FASEA education standard compliant and 96.4% for those who do not intend to do any further study
- 53.6% of respondents support the Experience pathway as proposed by the Government, however 25% of respondents believe that the Government has gone too far
- The level of support for the Government’s proposed Experience pathway varies between 21.4% from those who are already FASEA education standard compliant to 84.3% for those who are yet to start the education journey, however intended to meet the FASEA Standard
- 22% of respondents believe that the Experience pathway will undermine community recognition of financial advice as a profession