ASBFEO sparks debate on adviser education standards

SMSFA chief executive officer Peter Burgess was responding to the recent submission from the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) to the government’s method of delivery for the experience pathway.

In its release, the ASBFEO expressed concern that the pathway designed to help keep more advisers in business will actually disadvantage “exemplar advisers” and dilute the quality of advice.

The ASBFEO argued that while it supports the introduction of a transitional arrangement for experienced financial advisers to meet education and training standards, it believes that “striking an appropriate balance between flexibility and rigour in education requirements is imperative to maintaining high standards of advice”.

“The government should consider requiring advisers under the transitional arrangement to complete additional hours of continuing professional development,” the office said.

“We acknowledge the need to appropriately recognise advisers’ long-term experience and commitment to compliance obligations in lieu of tertiary education. However, the loosening of the education requirements as one of the four education and training conditions outlined in the Corporations Act risks disproportionately disadvantaging exemplar advisers and diluting the quality of advice.”

The SMSFA submitted its own response to the consultation in May, stating the adoption of an experience only pathway to satisfy the education requirements does not meet the original policy intent of enhancing professional standards and moving financial advisory services towards becoming a true profession.

“The profession would have been better served with clear education pathways and options, that recognised the diverse financial advice system ecosystem,” the submission stated.

“Not the rigid one-size-fits-all approach adopted. There is a need for greater recognition of prior learning under existing tertiary education standards, and the approval or courses and education pathways set by a body comprising of regulators, professional associations, and tertiary education providers.

“These would have avoided the need for a watering down of the provisions and, in all likelihood, would have resulted in more advisers remaining in the profession. We acknowledge the concern around declining financial adviser numbers and the importance of retaining experienced financial advisers in the industry.

“There will be advisers who need time to prepare for their retirement and not be forced to sell their businesses under fire-sale conditions. They will need an opportunity to transition their businesses and hand over to the next generation.”

Mr Burgess said the SMSF Association has consistently advocated for and promoted the need for strong education and advice standards and the need for specialisation and specialist education sits at the heart of its mission and beliefs.