The federal government has opened consultation on education reform for financial advisers, issuing a working paper and seeking feedback by 17 April.
Assistant Treasurer and Minister for Financial Services Daniel Mulino said the reforms would “create a sustainable and flexible pathway for new advisers to enter the profession, to help address the decline in the number of advisers over recent years”.
The current qualifications standard requires financial advisers to complete an approved degree, pass an exam, undertake the professional year and subsequent continuing professional education.
The approved degree must align with curriculum requirements that cover 223 learning outcomes and topics.
The consultation paper noted this standard “is complex and lacks flexibility and has not been effective in supporting a sustainable pipeline of new financial advisers entering the profession. It is unattractive to school leavers due to the restrictive career path and requires a significant investment in study for career changers.”
The new standard would instead require entrants to complete a bachelor’s degree or higher in any discipline, four financial concepts subjects and four accredited financial advice subjects, while the other requirements would remain.
“These reforms ensure continuing robust professional standards for advisers, including requirements for completing a professional year, passing the financial adviser exam and maintaining continuing professional development,” Mulino said.
The proposed new curriculum would streamline the total learning outcomes/topics from 223 to 20 across the four core subjects, which the consultation paper says will align more closely with other professions such as law that have fewer learning outcomes/topics for each subject.
Taxation and commercial law subjects would be removed, as not all financial advisers provide tax-related financial advice, however, those subjects would remain mandatory for tax agents and Qualified Tax Relevant Providers (QTRP) at an Australian Qualification Framework (AQF) level 5, rather than the current AQF level 7.
Representative bodies welcomed the consultation, with SMSF Association chief executive Peter Burgess saying the proposed changes would maintain the overall education standard.
“It is essential we fix the current ‘one-size-fits-all’ pathway and attract future talent and like-minded professionals,” Burgess said.
“However, while greater flexibility is welcome, it will be important to mitigate the risk of variation in the quality of qualifications and licensee requirements.”
The Financial Advice Association Australia (FAAA) has long been advocating for more flexible degree pathways that recognise relevant studies that may have been undertaken in related degrees.
“We are very pleased to see the government has heard these concerns and is acting,” FAAA chief executive Sarah Abood said.
“Importantly, existing courses will continue to be relevant and current students can be confident that these degrees will qualify them to enter the profession in the future.”
