FAAA applauds resolution of experience pathway ‘issue’ amid ongoing adviser debate

The Financial Advice Association of Australia (FAAA) is delighted that the experience pathway issue has been successfully resolved, offering advisers greater clarity regarding their status within the industry.

“It is good that the experience pathway issue has been resolved. It has been subject to debate since late 2021, leaving many advisers unsure of their future in the profession. We welcome the recognition of the experience of long-serving financial advisers,” said the chief executive officer of the FAAA, Sarah Abood.

“Minister Jones should be congratulated for drawing a line under this matter.”

She specifically emphasised the incorporation of certain enhancements into the presently highly prescriptive regulations that dictate the coursework obligations for newcomers entering the profession.

“Students will now have the ability to have their studies reviewed and potentially approved via Treasury if their units do not exactly match the determination. This is a critically important concession; we need many more advisers entering our profession, and we don’t want to be putting artificial barriers in the way! Students should no longer need to repeat courses, at great cost in time and money, if they have effectively mastered the content already,” said Ms Abood

“We know that amongst our own membership there are many advisers and students who will benefit from this legislation”.

The FAAA had earlier requested several changes to the government’s experience pathway plans. Initially, the body asked for the pathway to oblige advisers to have membership in a professional association or to complete an approved ethics course by 1 January 2026.

“A requirement to complete the Code of Ethics Graduate level subject would ensure that all practicing advisers have a shared understanding and body of knowledge of our legislated code,” Ms Abood said in May.

This, however, was not endorsed by Financial Services Minister Stephen Jones.

The FAAA also sought the inclusion of a 10-year sunset clause. Namely, Mr Abood argued that this provision would guarantee that the pathway serves as an appropriate transition for established and experienced financial advisers and planners, minimising the potential for misuse.

Without the clause, she said, “we will be in a position whereby planners currently in their thirties could continue to practice indefinitely with no further qualifications required”.

Mr Jones, however, opted against making the inclusion. Instead he 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.

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

The experience pathway legislation was passed by Parliament last week. In a subsequent statement, Mr Jones said: “The new legislation will recognise the experience of financial advisers who have passed the financial advisers’ exam and have 10 years’ experience and a clean record, without requiring further qualifications.

“This will help to address the mess left by the last government which oversaw an industry that lost over 10,000 financial advisers since 2019. Ongoing advice fees also increased by 41 per cent between 2018 and 2021. This left Australians without access to affordable and quality financial advice.”

Advisers, however, hold differing opinions on the matter, with some applauding the pathway, while others view it as a hindrance to the professionalisation of advice.