Jones confirms ‘no sunset clause’ in experience pathway, FAAA ‘disappointed’

In a video message to the Stockbrokers Conference held in Sydney on Tuesday, Mr Jones announced that legislation will shortly be introduced to the Parliament to enact the experience pathway.

“This bill will recognise the qualification that comes with a decade of experience, while maintaining a clean record on the adviser register. There will be no sunset clause on this qualification,” the minister said.

“Mostly, this bill is providing us with time to manage the transition while we clean up the settings on education qualifications to facilitate and improve pathways for entries into the system. I’ll be doing more work on a pathway for new entrants over the second half of the year,” he explained.

“This is about taking measured pragmatic approaches that protect consumers, gives them access to qualified advice and works with industry, not against it.”

Last month, the government released the exposure draft bill to deliver its election commitment to recognise experienced financial advisers who pass the exam, have 10 years of experience, and a clean practice record.

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

However, surveys of the industry have suggested that advisers are divided on the government’s proposal.

In its submission to the government’s exposure bill, the Financial Advice Association Australia (FAAA) revealed that it had surveyed the draft legislation with 1,197 respondents of which 49.1 per cent said they were not in favour of the proposal as drafted.

The FAAA noted at the time that, among other things, there was significant member concern about the unlimited application of the draft legislation and the lack of a sunset clause for this measure.

Namely, the group believes the inclusion of a 10-year sunset clause would make things fairer for advisers.

In September 2022, the then Financial Planning Association and the Association of Financial Advisers proposed the experienced provider pathway should include a sunset clause to end on 1 January 2032. This would mean that any financial planner/adviser who relied on an experience pathway and wished to continue to practice post this date would need to meet the education requirements for existing advisers and undertake further study.

“We believe that this measure should be better targeted to older advisers, with the inclusion of a 10-year sunset clause,” the chief executive of the FAAA, Sarah Abood, said earlier.

“This would represent an appropriate transition for established, experienced financial advisers and planners with a clean compliance record. Otherwise, we will be in a position whereby planners currently in their thirties could continue to practice indefinitely with no further qualifications required,” she added.

Responding to Mr Jones’ announcement on Tuesday, Ms Abood told ifa that the FAAA is disappointed.

“We’re disappointed that the sunset clause suggestion has not been included,” she said.

“However, it is a positive that advisers are getting more clarity on the operation of the pathway, and we will continue to work with the minister and Treasury to help ensure implementation is smooth.”