Stephen Jones has moved to address education standards in the financial advice industry, today announcing that Treasury will develop a consultation paper on options to “streamline the education requirements for financial advisers”.
“The Government made an election commitment to remove the tertiary education requirements for financial advisers who had passed the exam, had 10 years’ experience and a clean record of financial practice. I have asked Treasury to develop a consultation paper on options to streamline the education requirements for financial advisers, including for new entrants. I expect consultation to commence shortly,” Mr Jones said in a statement.
“Industry has also made representations on the Code of Ethics and identified improvements that industry thinks could be made. I have heard these views and I have asked Treasury to consult on the Code in 2023, after the Government has considered its response to the Quality of Advice Review.”
In the lead up to May’s federal election, Mr Jones said Labor would not require advisers with 10 years of experience and an “unblemished record” to complete a university degree to practice.
Currently, existing advisers with no degree must have an approved qualification by 1 January 2026.
On a special Momentum Media podcast recorded prior to the federal election, Mr Jones outlined his plans to address the education standards.
“… there’ll be a bunch of people who’ve been providing excellent advice for decades that we don’t want to tip them out of the industry at exactly the time when we need them,” he said.
“We need them as mentors, we need them as service providers, we need them as trainers, we need them in the industry.”
On Wednesday, Mr Jones also addressed the 30 September deadline for existing advisers to pass the exam and continue to provide financial advice, saying that following the deadline, he will ask Treasury to explore how the exam can be improved, such as reducing the number of questions.
“I continue to support the exam as a benchmarking tool which tests the practical application of a financial adviser’s knowledge, including on regulatory and legal requirements, and ethical reasoning,” he said.
“I remain committed to the exam testing these knowledge areas and content.”
On the latest episode of the ifa Show podcast, the Association of Financial Advisers (AFA) CEO Phil Anderson expected that the Albanese government would make good on its promise to address education standards, while the Financial Planning Association of Australia (FPA), said that addressing the education standards should be the “first order of business” for Mr Jones.
The current requirements have been criticised by a number of groups within the sector, including the FPA, AFA and The Advisers Association, with CEO Neil Macdonald saying the industry will experience a “mass exodus” by 2026 if changes are not made.
The number of advisers in Australia shrank below 19,000 late last year and is predicted to reach 13,000 by the end of 2023.
