Experience pathway enshrined in law

SMSF Adviser has learnt that the experienced pathway passed both houses on Wednesday.

Minister for Financial Services Stephen Jones introduced the Treasury Laws Amendment (2023 Measures No. 3) Bill 2023 to Parliament in June, which included measures to recognise experienced financial advisers who pass the exam, have 10 years of experience, and a clean practice record.

In a speech to the House of Representatives delivered at the time, Mr Jones said: “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 have the benefit of their experience through mentoring, through supervision and through employment. It also means that more Australians will have access to financial advice than would otherwise be the case.

“The government is committed to an advice industry with strong professional standards that give Australians access to high-quality financial advice and to do this by not creating unnecessary barriers to entry, ensuring financial advice remains a career of choice.”

According to the bill’s explanatory memorandum, there are 10,030 practising advisers that were first authorised in 2011 or earlier, which is the cut-off date for eligibility of the pathway.

Reacting to the bill's passage, the executive director of the Association of Independently Owned Financial Professionals (AIOFP), Peter Johnston, said: "Minister Jones has performed a great feat by delivering exactly what he said they would do in late 2020 at the AIOFP Conference".

"The market forgets that the Quality of Advice Review was not delivered until December 16th 2022, with January a non–event for business and politics, to respond on QAR and deliver this legislation in this time frame is remarkable. Hopefully the ‘naggers’ will now back off," Mr Johnston told sister brand ifa.

While the new measures will allow more experienced financial advisers to stay in or return to the profession, the response among advisers has been split.

In its submission to the government’s exposure draft bill, the Financial Advice Association Australia (FAAA) said many advisers feel “aggrieved” by the timing of the announcement.

“A key factor influencing member sentiment about this proposal is the timing of its introduction,” the FAAA wrote.

“The transition period by which time existing planners/advisers must have completed an approved qualification, commenced more than four years ago on 1 January 2019. Many existing financial planners/advisers, whose qualifications were not recognised by FASEA, have undertaken study during this period.

“Hence, some members feel aggrieved that they have invested substantial time and money in completing qualifications that now might not be required.”