‘Uncertainty’ surrounding government’s education proposal could see more advisers exit

In its submission to Treasury this week on the Education Standards for Financial Advisers policy paper – which proposed a pathway coined the “experience pathway” that streamlines the minimum education requirements and recognises on-the-job experience for individuals with 10 or more years of full-time experience – the industry group said the news has already impacted the decision-making of many advisers.

“We are concerned by this, and are very conscious of the additional uncertainty that this announcement has generated,” the submission read.

“It is important to note that there are still a substantial number of financial advisers with significant additional study required in order to comply with the FASEA standard by 1 January 2026. Some are yet to commence their study. The longer this uncertainty lasts, the greater risk posed that these advisers may not be able to complete the required study in time.”

The AFA also noted the drop in the number of advisers in Australia, which shrank below 19,000 late last year and is predicted to reach 13,000 by the end of 2023.

To combat this, the AFA argued the exodus of experienced advisers can be “positively influenced” by better recognition of prior education and that government’s proposal could change the mind of many who have decided not to undertake further study.

In the submission, the AFA recommended that anyone who has already passed the FASEA standard should not be required to do any further study and that any existing advisers should be able to choose whether they stick with the existing standard or pursue one of the pathways outlined in the proposal.

“The reality is that there have already been a large number of experienced advisers who have left the profession,” it read.

“Some of them might have completed the exam and could therefore come back. Others will not have completed the exam and thus a return would not be possible. For a large number of them, this change will have come too late to influence their decision to leave the financial advice profession.”

The submission comes after The Advisers Association chief executive Neil Macdonald said late last year that if the education requirement issue is not urgently addressed, the advice sector will experience a “mass exodus” by 2026.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.