In a statement on Monday morning, Minister Jones announced that the government is set to reform the current education pathway for advisers, which he said is “not sustainable”.
“The Albanese Government is rebuilding a strong and sustainable financial advice industry that ensures Australians can access high quality and affordable financial advice,” Minister Jones said.
“The advice industry was abandoned and decimated by the former Coalition government, as the number of advisers fell from 28,000 in January 2019 to less than 16,000.
“The government will reform the education requirements for professional financial advisers to create a sustainable pathway for new advisers to enter the profession.”
Under the current professional pathway for financial advisers, prospective advisers are required to complete an approved qualification that is limited to those focused specifically on financial advice, the 1,600-hour professional year, the financial adviser exam, and meet continuing professional education (CPE) requirements.
“School leavers are not attracted to the specialised area of study, and it is a significant investment for career changers. Fewer Higher Education Providers are offering courses due to the lack of entrants,” Minister Jones added.
“Under the government’s changes, the proposed education standard will centre around a new requirement to hold a bachelor’s degree or higher in any discipline.”
While the degree requirements will be opened up, the minister said prospective advisers will still need to meet minimum study requirements in relevant financial concepts “such as finance, economics or accounting”.
“They will also need to complete financial advice subjects covering ethics, legal and regulatory obligations, consumer behaviour and the financial advice process,” he said.
“This provides relevant core knowledge for an adviser, streamlines entry into the industry and retains the important role of tertiary education.
“It will also bring down the costs on prospective advisers and make it easier for people to change careers into financial advice later in life.
“For most students studying a Commerce, Economics or Finance degree – or people moving across from other financial services careers – the cost and time to meet the requirements under the new standard will be halved.”
All of the other requirements – completing a professional year, passing the financial adviser exam and undertaking ongoing CPE – will all remain.
According to Minister Jones, the reforms will also complement the education requirements for the proposed new class of advisers (NCAs), which he had updated in December last year.
“We will ensure the pathway is aligned to enable the new class of adviser to transition into the professional advice ranks,” the minister said.
“The government will work with industry and higher education providers to ensure an appropriate transition to the new education standard.”
He added that the government was also halting the second stage of the registration process for financial advisers established by the Better Advice Act, which would have required individual advisers to register annually with the Australian Securities and Investments Commission from 1 July 2026.
“Financial advisers are already registered by their authorising Australian Financial Services licensees under Stage 1. Not proceeding with Stage 2 removes unnecessary red tape on individual advisers,” Minister Jones said.
“These reforms build on the Government’s Delivering Better Financial Outcomes package to help address the current supply shortage of financial advisers, cut red tape that is not leading to better consumer outcomes, and strengthen the industry’s ability to meet the future demand for financial advice.”
And when they introduced Stage 2 it didn’t occur to them that this increased red tape? Once more decisions taken by morons with no understanding of both common sense and business reality!