Quality of Advice Review must address lack of new entrants ‘challenge’

“There are a range of factors including the perceived reputation of the financial advice profession, the education standard, the availability of courses and the appetite of practices to employ new entrants and put them through the Professional Year,” the submission read.

“We would like to see this issue carefully analysed to assess what more could be done, including potentially through rationalisation of the Professional Year requirements or through government support of new advisers.”

The AFA also addressed the government’s proposal that the QAR will be undertaken by a single independent reviewer, saying it is “essential” the review have access to experienced people within the advice sector.

“We would like to ensure that the financial advice sector has the opportunity to contribute to the understanding of the current issues and the identification of solutions,” it read.

“It would be profoundly disappointing for the reviewer to make final recommendations that do not align with the underlying reality of the sector or that lack the support of the financial advice profession. This is not to say that the reviewer should not canvas and recommend controversial ideas or to challenge conventional thinking, however this should happen as part of the process and not at the conclusion.”

The submission comes only a week after the AFA issued a separate submission to Treasury regarding the government’s Education Standards for Financial Advisers policy paper.

In it, the industry group raised concerns about the bill’s “uncertainty” that could see more advisers exit the industry.

Last September, it was reported that the number of advisers in Australia shrank below 19,000 and is predicted to reach 13,000 by the end of 2023.