Government urged to ditch experience exemption for advice education framework

The Financial Planning Association of Australia (FPA) has reiterated its view that the competence obtained through experience should be better recognised in regards to adviser education standards.

In its submission to Treasury, the industry group has recommended that the government must not implement an experience exemption to the education framework.

The FPA also noted the government’s experience pathway, saying it alone will not achieve a reduction in the cost of advice. However, should it go ahead as proposed similarly to the Joint Associations Working Group’s (JAWG) submission, it recommended that those who can access the pathway should have 10 years of relevant experience, a clean record and called for a 10-year sunset period.

“The FPA believes unassessed experience alone is an insufficient foundation to meet the objectives of raising the minimum education requirements for professional financial advice providers and continuing to build consumer confidence in the profession,” the FPA said in a statement.

“Having surveyed its members to understand their views on the proposed modifications, 55 per cent of FPA members have already completed their required education and 35 per cent are on track to meet the existing education standards.

“Of those surveyed, 71 per cent of members meet the proposed experience pathway while 55 per cent oppose the introduction of the proposed experience pathway, and 73 per cent would only support an experience pathway if there was a sunset introduced.”

In a separate statement also released this week, the FPA welcomed a proposal to move to a principles-based approach in the Quality of Advice Review proposal paper released last month.

However, the association stated that the definition of “personal financial advice” must have the provision of financial advice “at its core” and not be based around product.

“It believes the regulatory costs of providing personal advice must help improve the affordability of advice for consumers by ensuring there is a level playing field for the regulatory requirements and standards imposed on advice providers,” the FPA said.

“Further, the regulatory environment should facilitate the provisions of simple personal financial advice to clients in an affordable manner by financial planners and financial planning practices, as well as non-relevant providers, to meet consumer demand.”

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.