Financial Planning

Experience pathway must have end date

advisers experience pathway

An experience pathway for existing financial advisers must contain a sunset clause ending in 10 years, with advisers able to swear they have clean records.

The introduction of an experience pathway for existing financial advisers must contain a sunset clause and require practitioners to show they have a clean record and be part of a professional body that has conduct standards, according to a group of 11 professional associations.

The Joint Associations Working Group (JAWG) has requested the federal government consider a number of inclusions as part of the review of financial adviser education standards currently being carried out by Treasury, including putting a cap on when the experience pathway could be used.

“The JAWG recommends that the experience pathway include a sunset clause which ends 1 January 2032. Any adviser who wishes to continue to practise post this date would need to meet the education requirements for existing advisers,” it said.

It stated it collectively supported a modification to the existing adviser education framework in regards to the experience pathway for existing advisers, noting it could be accessed where an adviser had passed the mandatory exam and had relevant experience of 10 years’ full-time equivalent work providing personal advice to retail clients between 1 January 2004 and 1 January 2022.

These advisers would also have to demonstrate and maintain a clean record and the test of that record should be aligned with the Australian Securities and Investments Commission reference checking protocol, with the adviser signing a statutory declaration, with penalties for false declarations, that they have a clean record.

The working group also requested advisers using this pathway complete an approved ethics subject by 1 January 2026 or be a voting member of a non-profit association that has a code of ethics or conduct, a disciplinary system and mandatory continuing professional development obligations.

Commenting on its own submission, which mirrored much of the JAWG submission, the Financial Planning Association (FPA) stated: “The competence obtained through experience should be better recognised in the education standards and [the FPA] recommends that the government should not implement an experience exemption to the education framework.

“The FPA believes that simply providing an experience pathway alone is not going to achieve a reduction in the cost to produce advice.

“The FPA believes unassessed experience alone is an insufficient foundation to meet the objectives of raising the minimum education requirements for professional financial advice providers and continuing to build consumer confidence in the profession.”

It added a survey of its members found 55 per cent oppose the introduction of the proposed experience pathway and 73 per cent would only support an experience pathway if there was a sunset clause introduced.

The JAWG is made up of the Association of Financial Advisers, Boutique Financial Planning Principals Association, Chartered Accountants Australia and New Zealand, CPA Australia, FPA, Financial Services Council, Financial Services Institute of Australasia, Institute of Public Accountants, Licensee Leadership Forum, SMSF Association and the Advisers Association.

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