‘What a disgrace’ v ‘best day ever’: The experience pathway divide

Under the newly passed legislation, an adviser is deemed to have met the education requirements if they have 10 years (cumulative) experience providing advice between 1 January 2007 and 31 December 2021, and have not recorded any disciplinary action on the Financial Advisers Register (FAR) before 31 December 2021. Advisers still need to pass the exam.

There are often two definitive sides of most government decisions and legislation, with members of an affected group coming down on one side or the other, usually with a few subtle gradations that explain why. The experience pathway is a different animal, with the camp that opposes the legislation itself split along ideological lines.

In a poll run on ifa following the release of the exposure draft bill and explanatory memorandum in April, the results were clear: support was split almost exactly down the middle.

For the cohort of advisers that were in favour of the measures, it was easy to understand the motivation. The vast majority felt that way because they would directly benefit from the 10-year experience exemption.

In the comments section of ifa, commenters that agree with the measure praised the government, with a few even pledging to vote Labor for the rest of their lives.

Other commenters echoed the sentiment, albeit with a more tempered outlook for the future: “I seriously didn’t think that Stephen Jones was going to do anything other than make noises. This is a small, but positive step in the right direction. I HOPE this might mean that some more common sense initiatives are implemented in the near future – not holding my breath though.”

It would be easy to think the other side of the debate would follow a similar framework, but that doesn’t seem to be the case.

Instead, there is a further split between those that see the experience pathway as detrimental to the recognition of financial advice as a profession and those that are mad the rules have changed after they obtained degree qualification.

Indeed, it is hard to tell exactly which viewpoint prompted comments like, “A very sad day for the profession” or “What a disgrace”.

What is clear is that while the two camps ultimately come down on the same side of the issue, it has two entirely different motivations.

It’s hard not to sympathise with a group that has taken time out of their business, at no small expense, to do what they thought was necessary to continue their career and business, only to have the rug pulled once the time and effort had already been spent. Many saw little value in the endeavour in the first place and could have avoided what they see as a waste entirely.

Comments such as this exemplify that feeling of defeat and anger: “I spent $15,000 and countless hours upgrading my qualifications and now I do not need it. Who is going to compensate me? Also lost $1.0M in trail commission. This industry is f*****.”

Others called for compensation for time and money lost: “Hi FARSEA/ASIC, please refund the $2K so called Ethics course costs and the 120 hrs x $300 = $38K. An utterly useless Ethics course that pollies, ASIC, APRA, bank execs etc didn’t have to do but really should.”

While more still argued for a return of what they gave up when leaving the industry: “Compensation for the advisers who left the industry because they did not want to do a university degree and now wouldn’t have had to?”

At the same time, the march towards a profession has long been the goal of many advisers. The idea that yet another carve out will hinder that progress is inevitably frustrating for those that recognise the value of such a designation.

Some hoped that there would be a delineation between advisers with and without a degree: “Society won’t view financial planning as a legitimate profession if its practitioners are missing formal education. This is disgraceful policy, but at least there has already been a mass exodus of advisers who were unwilling to do the study. Anyone who sidesteps formal education is cutting corners and their laziness compromises the integrity of the profession itself. Experience counts, but let’s not delude ourselves into thinking it’s a replacement for a university degree. We must now lobby to have the FAR register identify the uneducated advisers aka experience pathway.”

Those that obtained degrees they now wouldn’t have needed were also among this chorus of voices: “Many degree-holders welcome this. The lazy advisers will continue to bemoan the regulatory pressures without acknowledging their contribution to this, in the first instance. Don’t forget to dislike this comment.”

Ultimately, there may not be any definitive resolution to the fracture within the advice profession, but at least everyone knows where they stand.