Speaking in a recent webinar, BT head of financial literacy and advocacy Bryan Ashenden said in December last year Labor announced it would look to introduce an experience pathway where advisers with 10 years of experience and unblemished record would not be required to complete a bachelor’s degree to practice.
Mr Jones has since outlined that this would be a transition arrangement aimed at advisers in the latter years of the profession to halt the large-scale exit of advisers from the industry.
At the time of the announcement, Mr Ashenden said it was a bit unclear whether any formal education would still be required.
“We saw the Coalition come out with a very similar policy soon after that was subject to a consultation. The Labour Party can now pick up any of the feedback that came through that consultation period,” he said.
Mr Ashenden noted that Labor has made it clear that this would be a measure that Labor would look to implement as soon as possible after forming government.
The expectation is that the experience pathway measure will be introduced via a legislative instrument, he said, which is the way various standards were introduced by FASEA in the past.
“So, [there is no need] to have legislation formally introduced into Parliament,” he said.
“It is our understanding that Treasury has been instructed to commence drafting the relevant legislative instrument to give effect to this [measure].”
While the measure will be introduced via legislative instrument, there is still a chance it could be disallowed, warned Mr Ashenden.
“It’s possible that within the first 15 sittings days of that legislative instrument being registered that somebody could put it up for debate,” he explained.
“If it did go up for debate and that motion is successful, then that pathway would no longer be in place.”
Mr Ashenden said there are still are lot of aspects with the measure that remain unclear at this stage.
One of the questions that remains, he said, is how the 10 years of experience for the pathway would be measured.
If it is measured at 1 January 2026, which is when the existing education pathways for existing advisers are due to expire, then this would mean that you needed to be an adviser since at least 1 January 2026.
“That date would make sense, because if you think back to what the qualification was to be an existing advisor under the professional standards regime, it talks about being on the register at some point between the 1 January 2016 and the 31 December 2018,” he said.
It could also be set a potentially earlier date than that, he noted.
“Also, if you think about 10 years of experience, is that full time experience? What does that mean for someone who has worked part time during that 10 year period?” he questioned.
“What about someone who took a break, for example, for a period of time over that 10 year period, how does that actually work? How does that impact on those 10 years?”
It’s also not clear what is meant by an unblemished record, said Mr Ashenden.
“Does that mean that ASIC hasn’t taken any action against that adviser and is it no action at any point in time? Or does it mean no action during that 10 year experience pathway?” he questioned.
“What happens if you qualify for the 10 years of experience and you’ve got a clean record and then, but then, as an example, in mid 2026 something comes up before ASIC as a result of an investigation or as a result of a report from an AFSL that says, actually, there was a potential issue in relation to this adviser and that issue was something that occurred during that 10 years of experience?
“If something does then come to fruition and ASIC chooses to impose some of action, does that mean you’d actually lose your 10 year experience pathway?”
Mr Ashenden noted that if an adviser lost the 10 year experience pathway at that particular point in time, then all the other existing pathways for advisers would have expired.
“You would end up [having to meet] the new adviser entry requirements,” he said.
While it seems sensible for an existing advisor with an unblemished record (but have they been given out good advice? or basically just been flogging insurance and ‘product’ for a decade or more?) for ten years to be able to remain in the profession via the ‘experience pathway’, it seems a step backward as a ‘profession’ when you could end up having a 30 year-old ‘planner’ who got their DFP straight out of high school in 2012, hasn’t bothered to start on any tertiary study yet (despite it being the current requirement) and then manages to remain in the ‘profession’ (possibly until the 2050s) never having done any tertiary education in the field of financial planning.
I say this as a 60-year old who did a DFP ‘for fun’ in 2018 and got registered as a Financial Planner under the existing requirements (so I didn’t have to do a year of ‘work experience’) but has since managed to pass the FASEA exam and do a MFinPlan part-time while having a full-time job (not in financial planning) and will do a bit of FP as a part-timer for the next decade or so.
If I can do an MFinPlan degree at 60, why should some 30 yo financial planner who intends on remaining in the profession for decades to come be averse to upgrading their DFP with some tertiary study?
Perhaps the ‘experience pathway’ should be limited to those in the profession with ten years continuous full-time experience as of now, and there be a requirement for those people to get a tertiary qualification in financial planning within the next decade (plenty of time for younger ‘experience pathway’ planners to upgrade their qualifications part-time, and older planners (eg. 55+) can remain in the ‘industry’ for another decade and then retire rather than do some uni studies?
Younger planners (under 55) would have been relatively young (40s or under) when the new educational requirements were implemented, so I assume most would have either gained their tertiary qualification by now.
It would be interesting to see a break-down of current planners educational qualifications (completed or in progress) by age cohort — the need for an ‘experience pathway’ might only be present for a relatively small number of older planners.
BTW you can already get a BFinPlan from WSU with many of the subjects able to be completed (at a reduced price) via a ‘challenge assessment’ i.e. you don’t have to do the course material or assignments, but just pass the invigilated exam (which for an ‘experienced advisor’ should be an old doddle, if they know their stuff).
Alternatively, perhaps those Financial Planners who remain in the industry via the ‘experience pathway’ should be required to pass the CFP courses and exam, instead of a tertiary degree? My MFinPlan qualification gives me exemption for 3 of the 4 CFP courses, and the CFP exam should cover a mix of what you would have learned from a tertiary degree in financial planning and/or ten years of experience as a financial planner.
Stephen Jones is capable of loose talk but the industry will have to “wait and see” what the final form takes.
From 1 January 2019, the education uplift commenced for new entrants – that seems to be the logical starting point for an experience look-back for those who were on ASIC FAR and were in the transitioned category.
As for the determination of what constitutes an “unblemished record”, the licensee does most of the oversight and ASIC is reliant on the AFSL to report breaches. (ASIC has been know to target AFSLs such as the banks for a big publicity campaign etc, but by and large the licensee is in the box seat.)
So the clean record would need to be a history of high rating file reviews. As each compliance team is likely to have developed its own standards and rating systems, the overall (external) rating will have to have strict guidelines as to what is a ‘misdemeanour’ vis a vis a breach. If the measure results in only reportable breaches, the system will have failed as the new breach reporting is only in its infancy and prior to that, there was AFSL discretion/assessment.
This is likely to be almost impossible to do simply and effectively to give carriage to the basic proposition that experience means you can circumvent further education.
Would it have been a better option to suggest that for experienced advisers, they get to test their technical competency via a special purpose test? This would have to be in 3 iterations – investment specialists, insurance specialists and holistic advisers, as a recognition that specialisation has occurred. If an experienced adviser has passed the industry exam and can now pass a technical exam, it would provide an industry wide marker they have demonstrated their competence.
That leaves only the need to complete the Ethics module to finalise their education uplift.
This is how it should have been constructed from the beginning. Back filling with experience pathways is very fraught and appears to be ultimately political, not substantive. Or with Stephen Jones, just a true indication he is not across this portfolio.