Financial advisers - Australia to remove qualification requirements

After concern that financial advisers with extensive experience are leaving the industry, the Australian government has released a draft bill removing tertiary education requirements for them.   

Under the current law, existing Australian financial advisers must complete an approved qualification by 1 January 2026 to meet the required standard.  The draft bill removes that requirement for advisers who:

a) have completed a minimum of 10 years full-time equivalent experience as a financial adviser in the period 1 January 2007 and 31 December 2021 and;

b) have a clean disciplinary record as at 31 December 2021.  That essentially means that the adviser hasn’t been banned or disqualified.

The advisers will still have to pass an exam and comply with continuing professional development requirements, but obviously the bar for acceptance has been lowered.  Experience on its own, counts as a “qualification”.

New Zealand already has a more flexible framework than Australia for advisers to demonstrate their general competence, knowledge and skill.  As set out in the Code of Professional Conduct for Financial Advice Services, advisers have several options including holding certain qualifications, or being an authorised financial adviser immediately before the commencement of the Code.

The Financial Markets Authority in New Zealand currently recognises certain Australian qualifications as counting towards the New Zealand qualification requirements.  It will be interesting to see whether this changes if the draft bill is enacted.

More fundamentally, the question has to be - does experience alone equate to an up-to-date qualification?  Obviously, no-one wants good experienced financial advisors to leave the industry just because they can’t face further study.  But is experience alone enough?  Yes, in certain cases but not in others, experience could hide a lack of up-to-date knowledge.  So, an interesting theoretical debate, whichever way one considers it.

Craig langstone is a partner at fee langstone

hannah piggin is an associate at fee langstone