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Experience pathway may be open to feedback, refinement

Mike Taylor3 August 2022
Telescope looking into past

Financial advisers may be given an opportunity to respond to the experience pathway proposals that Treasury will put to the Assistant Treasurer and Minister for Financial Services, Stephen Jones.

Jones referred the experience pathway to Treasury more than a month ago and is expected to receive the department’s response within weeks with an expectation in some quarters that there will be room for some consultation before it is finally implemented.

This appears to be consistent with the approach being flagged by the Quality of Advice Review (QAR) that it will be making public a proposals paper for consultation prior to making its preliminary recommendations to the Government.

The “experience pathway” is capable of being put in place by legislative instrument but financial advice groups have emphasised that the devil will be in the detail and welcomed the possibility of consultation.

Stockbrokers and Investments Advisers Association chief executive, Judith Fox said that member of her organisation were understandably impatient because they had placed their plans on hold pending the details of the experience pathway.

“And, for our members, the expanded qualification pathway is also important,” Fox said noting the inappropriateness of financial adviser-centric degrees for stockbrokers.

Association of Financial Advisers (AFA) chief executive, Phil Anderson said the detail underpinning the “experience pathway” would be critical to the decision-making of financial advisers.

“We have been calling for clarity on this since well before the election and we were grateful when the minister referred it to Treasury.”

“It is a very important decision with significant consequences for financial advisers,” Anderson said.

The original concept of the experience pathway was that it should apply to financial advisers with 10 years’ full-time experience and a clean compliance record.

Jones has made clear that it is not an open-ended proposition and that it will have a start and end date.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Anon
1 year ago

Why are we still waiting for this? It is a very narrowly scoped exercise, which Jones said he would act on quickly once elected and would not be waiting for the QAR. Yet the QAR, which is far broader in scope, seems to be making much faster progress. Having made a commitment to quick change, Jones needs to hurry up and deliver whatever the outcome is, so that everyone who put plans on hold awaiting that outcome can move forward.

Chris
1 year ago

There should never have been an “experience pathway” mentioned. For countless years everyone has known the lay of the land. If there are to be “concessions” from the government or their bureaucracies then it should be removing Frydenberg’s ASIC levy or some of the red-tape we must operate with.

Consultation at the 11th hour?
1 year ago

Putting it out to consultation is simply recognition that this is a lot harder to do, than to say, in order to secure votes.
10 years experience may be easily defined (unless it gets ‘combobulated’ with carve out/ins for part-time, career break, etc) but how is the ‘clean compliance record’ going to be ascertained?
It would seem the main option there would be an AFSL attestation as, until recently, the compliance records for Advisers were all within the licensee purview. Does this then lead to the chance of ethical blindness, self interest bias, or, some other bias evident in the human condition?
It would seem, the only way it can be done to a high standard would be for advisers who are specialists such as investment or insurance, to undertake a technical exam that is constructed to demonstrate that the 10 years+ experience has manifested into a very sound practitioner.
(Only individuals that haven’t undertaken further study argue experience trumps education. They are the 2 sides of the same coin with both sides necessary.)
I agree a ‘one stop shop’ option for experienced advisers is not appropriate as it is a retro fit and not fair but taking it right down to simply an experience pathway is too easy. There should be some demonstrable uplift.
A lot of time has been wasted, there should have been a better thought out pathway for existing advisers but we ended up with an idealists vision for this and only now consultation is starting.
When will governments learn that consultation is needed at the start of a legislative reform process not two thirds of the way through?

Andy Semple
1 year ago

Basically any stockbroker (or Fin Planner) that was employed pre-the introduction of the AFSL Regime (being 2002) should be exempt from all this further education nonsense.

We currently have an industry of people employed who have never experienced a severe mkt correction. Anyone employed post 2012 has only ever enjoyed a bull mkt (the MAR 2020 COVID correction was over inside 4 months). This reliance of “recent” Uni grads with Fin Planning specific degrees over mkt veterans (that’s someone with 20 yrs plus) means the financial advisory profession is being predominantly managed by people with no real experience.

You can have all the degrees in the world but they don’t mean diddly squat in the real world where as their is no substitute for mkt experience.
And I’m someone who’s got 2 degrees, taught a Uni, written a book on derivatives, managed and owned several AFSL’s and has been in the game since 1996.

Anti-bad regulation
1 year ago
Reply to  Andy Semple

Agree.
I’ve seen a few “new” clients recently with the advisers you refer to above who appear to have moved everything into cash a month ago…
We also have to consider fund managers who may also not have experience in a higher inflationary environment…