Late last year, Stephen Jones – now Minister for Financial Services – promised substantial changes to the adviser professional standards framework if Labor was elected in 2022.
Denouncing the “egregious injuries Scott Morrison … inflicted on [the advice] industry,” Jones unveiled Labor’s plans for an experience pathway which would allow advisers with 10 or more years on the job to skip having to undertake a bachelor’s degree. While opinions about the proposed pathway (and with the similar one offered by the Morrison Government a week later) were mixed at the time, this nonetheless represented a step towards recognising some of advisers’ long-standing concerns about FASEA and its effects on the industry.
However, adequate recognition of professional experience is just one of a range of issues advisers have criticised about the FASEA framework over the years. Whether either party envisaged more widespread changes post-election remained an open question. And when it was announced that the Quality of Advice review would exclude any recommendations pertaining to the professional standards legislation, it appeared as if broader reforms were unlikely in the near future.
Recently, though, the Government – via Jones – reified its commitment to the professional pathway and said consultation would soon open on further changes aimed at streamlining education requirements for advisers (including new entrants). On top of that, Jones said Treasury will consult on improvements to the adviser exam – such as a reduction in the number of questions – as well as potential changes to the Code of Ethics.
While consultation on the exam and Code aren’t scheduled to occur until next year (after the Government responds to the Quality of Advice review), it’s clear now that the tide is turning.
The Code, in particular, has been a consistent bugbear for many advisers since FASEA’s introduction. This is both due to its wording – which could, depending on one’s interpretation, invalidate a significant amount of financial advice due to nebulous “conflicts of interest” – and due to confusion about its practical applications, which has been a reoccurring stumbling block in the adviser exam.
Given that there is now a clearer timetable for fixing the professional standards framework, we’d like to know: what do you think needs to change?
