Education and exam consultation welcomed due to 'shameful' current standards

News that a consultation paper will be developed on education standards and the adviser exam has been welcomed by the Stockbrokers and Investment Advisers Association (SIAA), with CEO Judith Fox slamming the current standards as "shameful".

Last week, financial services minister Stephen Jones said the government would look at options to "streamline the education requirements for financial advisers" and addressed the 30 September deadline for existing advisers to pass the exam and continue to provide financial advice, saying that following the deadline, he will ask Treasury to explore how the exam can be improved, such as reducing the number of questions.

Speaking to ifa, Ms Fox said retaining experienced financial advisers will stop "thousands" more orphaned clients unable to access advice and also ensure new entrants can be mentored.

"Experienced advisers will also be there to steer clients through volatile markets. Formal qualifications accredited by the Securities Institute of Australia have been required for stockbrokers since 1960, so we always queried why their prior learning was not being recognised," Ms Fox said.

"The education standards required by recent legislation focused on financial planning qualifications and did not take into proper account the decades of qualifications and CPD stockbrokers and investment advisers had undertaken. Many in our industry also have graduate and postgraduate qualifications suitable to working in equity markets, yet these were not considered approved degrees."

Ms Fox continued: "Of great importance is that an expanded education pathway creates a career path in our industry, as it means that stockbroking and investment advice firms can attract new entrants, given that we hope that the degrees that are best suited to a profession in investing — commerce, business, finance and economics — will be approved.

"It is shameful that people with these degrees are deemed unqualified under the current standards, despite approval by the education regulator TESQA as these degrees being best suited to a career in investing."

In last week's announcement, Mr Jones also addressed the 30 September deadline for existing advisers to pass the exam and continue to provide financial advice, saying that following the deadline, he will ask Treasury to explore how the exam can be improved, such as reducing the number of questions.

Ms Fox reiterated that addressing the adviser exam has been a concern for the SIAA for some time.

"We have been pointing out for some years that the adviser exam is not fit for purpose, as it is geared to financial planning — which represents only a part of the broad advice ecosystem — and contains questions which have two correct answers, only one of which will be accepted," she said.

"The lack of individual feedback has also been an issue. We do welcome the review of the exam, but note that the need for a review acknowledges that the exam is problematic. Unfortunately, this means that experienced advisers who have failed do not benefit from the review, despite the confirmation that the exam is not fit for purpose. The impact on those experienced advisers has been profound."

In the lead up to May's federal election, Mr Jones said Labor would not require advisers with 10 years of experience and an “unblemished record” to complete a university degree to practice.

Currently, existing advisers with no degrees must have an approved qualification by 1 January 2026.

On a special Momentum Media podcast recorded prior to the federal election, Mr Jones outlined his plans to address the education standards.

"... there'll be a bunch of people who've been providing excellent advice for decades that we don't want to tip them out of the industry at exactly the time when we need them," he said.

“We need them as mentors, we need them as service providers, we need them as trainers, we need them in the industry."

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.