Consultation on the proposed experience pathway for advisers wrapped up two weeks ago, and the prevailing sentiment seems to suggest it will – further adjustments notwithstanding – become law in the not-too-distant future.
The value of experience in determining the relevant qualifications for financial advice has been discussed extensively in the years leading up to and following the FASEA reforms in 2017. But the pathway itself (and the legislative amendment it would require) has only been floated as a serious possibility since late 2021, when both Labor and the then-Coalition government made near-identical proposals in the lead-up to both the election and the Quality of Advice review.
At the time, we noted that reception to these (very similar) proposals was far from unanimous. On the one hand, there were those who were concerned that an experience pathway would undermine both their individual efforts towards meeting the new education standards as well as the broader steps the industry has taken towards professionalisation.
On the other, there were advisers who have long felt that the implicit argument underpinning the FASEA reforms – that “being a professional” and “having an approved degree” are inextricably linked – was a repudiation of their years of experience providing advice.
Perhaps unsurprisingly, the pathway has become no less divisive in the intervening years. According to the Financial Advice Association Australia, its members (which comprise the membership of the former FPA and AFA) are essentially evenly split on the issue. In a recent statement, FAAA CEO Sarah Abood said that 50.9% of members supported an experience pathway while 49.1% remain opposed.
However, she added that the proportion of those in favour of the pathway would increase to 70% if two key changes were included: a 10-year sunset clause and a requirement to complete the Code of Ethics graduate level subject. She explained: “Much of the opposition to this proposal has been focused around the fear that this change will undermine the perception of financial advice as a profession.”
“Substantial changes have been made in recent years to professionalise financial advice,” Abood continued, “with a big impact on the many who have invested time and money in completing the additional qualifications required under FASEA.”
Speaking to NMP Education, Financial Planning Academics Forum (FPAF) co-chair and Griffith University senior lecturer Kirsten MacDonald explained that the FPAF and the FAAA’s education arm collaborated on a joint submission aimed at addressing the concerns highlighted in Abood’s statement.
“We recognised that the experience pathway is likely going ahead,” MacDonald said, “so the submission was more about emphasising the sunset clause – so it’s not an ongoing thing – as well as our concerns around the development of advice as a profession, which is what the legislation originally set out to achieve.”
She continued: “It’s really disappointing that this is where we’re at. It does feel like a wind-back to where everything started. And having been engaged with so many passionate professionals going back to 2014 when enrollments ramped up, it’s disappointing not just for us but also them.
“They made the choice to spend the money and take the time to move to the next level, only to find that those who waited it out have a new pathway available to them.”
