Proof Govt backed advisers over academics on ‘experienced pathway’

Mike Taylor

Managing Editor and Publisher

26 June 2023

The degree to which the Federal Government has sided with financial advisers over the views of academics on delivery of the ‘experienced pathway’ has been revealed by Treasury finally releasing the submissions to its Adviser Professional Standards Consultation.

And what those submissions reveal is that institutions such as Deakin University not only opposed the proposals around the ‘experienced pathway’ but also the relaxation of minimum education standards.

Indeed, the Deakin submission argued that a specialist financial planning qualification “is a foundational component in ensuring the continued transition of the financial planning advice sector to a true profession”.

At the same time, major licensees such as Sequoia suggested that as many as 30% of their advisers would likely take advantage of the ‘experienced pathway’ and Sequoia and other licensees suggested that allowing advisers to “self-declare” with respect to the pathway was unwise.

At the very least, the submissions argued that advisers should be required to sign a statutory declaration.

However, it was the universities and academics who sought to reinforce what they see as the value of tertiary qualifications in the context of ensuring financial planning is viewed as a profession.

“In no other profession is it sufficient for a new entrant to undertake a generalist qualification containing only a small number of core knowledge areas without the need to acquire specialised knowledge or training in the core competencies required of the profession,” the Deakin submission said.

“Second, education standards are equally important in ensuring that financial planners have the requisite knowledge and skills to provide financial planning advice, and in instilling confidence in the community. Maintaining high education standards for new entrants to the profession contributes to increasing consumer trust in financial planning and builds on the progress already made to overcome the various shortcomings of the advice sector identified by the 2018 Royal Commission into Banking, Superannuation and Financial Services.”

“Finally, unlike the clear education standards which new entrants must currently meet, relaxing the minimum entry requirement of the profession to include generalist degrees that do not require any specialised technical study creates a liability of administrative responsibility on licensees to ensure that individual financial planners are appropriately qualified and have the necessary competence.”

“It is unclear from the proposal where this administrative burden will lie, with both Higher Education Providers (HEPs) and AFSL holders implicated in upholding an educational standard that is not clearly defined. As a result, under the current proposal, there is a significant risk that the removal of the approved degree requirement and course accreditation process may lead to inconsistency in both the minimum training standards of individual financial planners and the quality and standard of courses offered by education providers.”