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Advice coalition proposes broader education slate for new entrants

The representative working group is lobbying the government for a broader section of study to be eligible for credit within the 'equivalent degree' requirement for advisers in the hope that more people will be encouraged to join the profession.

The Joint Associations Working Group (JAWG) has proposed a raft of changes to the education standards for new entrants to the advice industry, in an effort to work with government to arrest declining numbers in the profession by opening up the funnel of potential financial advisers in the education system.

Under the JAWG proposal a wider slate of pre-existing degree courses would be recognised, which would give new entrants and career changers greater flexibility in preparing to meet the education requirements which were originally defined by the (now defunct) Financial Adviser Standards and Ethics Authority in 2018.

A major criticism of the existing education regime is that the list of courses that qualify for credit in relation to the requirement for advisers to attain an ‘equivalent degree’ is too short, and does not give enough credit to related study. This criticism has become amplified as adviser numbers have sunk to historic lows; that number, now at around 15,500, has sunk 46 per cent since 2019, with only 381 new entrants joining (and remaining) in the profession last year.

  • The narrow qualification tunnel is further exacerbating the issue, as education providers are less willing to offer financial advice courses that are proving less popular with students who don’t see it as a viable career pathway.

    “Only a small number of tertiary educators offer financial planning studies, with many already reducing their courses,” JAWG stated in a media release. “With access to financial advice increasingly out of reach for many Australians, encouraging more advisers to the profession is now vital.”

    The working group’s proposal, which the group said has already been discussed with Treasury, contains three core elements:

    • Five core knowledge areas with a further three elective knowledge areas to be chosen from a broad list that recognises different streams of financial advice. Examples of elective knowledge areas could include SMSF Advice, portfolio management and aged care.¬†
    • The ability to complete study units across multiple programs that can be supplemented by bridging units either contemporaneously or later if required.
    • The curriculum is to be set and maintained by a broadly representative advisory group, including representatives from associations and academia.

    “Under the JAWG proposal, the minimum requirement for new entrants would remain a tertiary degree. Importantly, the existing approved programs would remain valid and available,” JAWG stated. “This proposal gives new entrants and career changers greater flexibility by recognising more of their pre-existing degree courses, while maintaining appropriate qualification levels to ensure consumer protection.”

    The Joint Associations Working Group is a coalition of 11 industry bodies representing financial advisers, stockbrokers, accountants, superannuation trustees and investors including the Financial Advice Association of Australia, the Chartered Accountants Australia and New Zealand, CPA Australia, the Self-Managed Superannuation Fund Association, the  Financial Services Council and the Stockbrokers and Investment Advisers Association.

    Tahn Sharpe

    Tahn is managing editor across The Inside Network's three publications.

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