The government will expand the pathway for entry into financial advice to allow anyone with a bachelor’s degree or higher to become an adviser following the completion of a number of core units related to the sector.
The change was announced by Financial Services Minister Stephen Jones, who said it would expand the supply of “high-quality, helpful and safe advice” while continuing to recognise the role of tertiary education.
“Under our proposal, individuals will be able to hold a bachelor’s degree or higher in any discipline,” Jones stated at an industry forum today, adding: “Prospective advisers will need to meet a minimum study requirement in financial concepts such as finance, economics or accounting.
“This means firms will be able to attract graduates with degrees in economics, commerce and finance, amongst others.
“They will also need to complete core prescribed accredited financial advice subjects. This will cover ethics, legal and regulatory obligations, consumer behaviour and the financial advice process.
“For example, someone with a commerce degree may only need to do the financial advice components – if they haven’t already done it.
“This will be complemented by the remaining standards that advisers need to meet – namely, the professional year, the financial adviser exam and ongoing education obligations – which will be unchanged.”
He said the need for advisers to complete a specialised financial advice degree did not recognise the way many people become an adviser.
“Most people who end up in the financial advice industry have told me that they did not take a direct path there. They didn’t know at the age of 18 that they wanted to be an adviser,” he added.
“The previous government set up a system that immediately thins the herd of potential new advisers.
“That means many young people are locked out if they want to keep their options open by studying degrees that apply across many industries.”
He recognised the work done by those who had completed a financial advice degree, but pointed out the need for more practitioners.
“I recognise that some advisers have followed the current pathway and I respect the hard work they have done to enter the profession – which is not going to be taken away from them,” he said.
“But the status quo is unsustainable and without change, the profession will hit another crisis point down the track, all while the demand for advice is only going to go up because of the 5 million Australians at or approaching retirement.
