AFA Proposes Education Changes to Prevent Adviser Exodus

The AFA will deliver a number of recommendations to the Financial Adviser Ethics and Standards Authority (FASEA) which will provide more scope for older advisers to remain in the industry after the introduction of new education standards.

The Association has drafted a position statement on the education requirements for existing advisers and will take it on a roadshow, and conduct webinars, to workshop with members ahead of its submission to FASEA in July.

AFA Chief Executive, Phil Kewin said the position statement was based on four core principles – professionalism, equity sustainability and value and under each of these the AFA was seeking particular outcomes.

These outcomes should include that the new minimum standard increases professionalism, equitably takes into account previous study of advisers, works to ensures the majority of advisers choose to stay within the profession and any further study is of value to an advice business and of interest to the adviser.

As such, the AFA has specifically called for the following:

• An improved definition of a related degree including recognition of prior learning in some areas
• A more equitable solution for advisers with an unrelated degree and further study, including recognition of the DFP program and a relevant professional designation as suitable for advisers to access the three subject bridging course
• Better recognition of professional designations such as the FChFP, particularly in relation to the treatment of unrelated degrees, options for advisers with no degree and through RPL
• A solution that better recognises older advisers and the reduced amount of time they will be able to benefit from changes to education standards
• Choice of study that enables adviser to undertake study in an area of interest and that align with the needs of risk specialists and formally recognises their specialist expertise

“…if we are going to continue to build the advice profession we need to recognise the specialised nature of advice”

Kewin said the proposals recognised the need for higher education standards for all advisers but also that some advisers may not have studied for some time and that others did not want to study areas that were not relevant to their daily work.

“At the moment, education is being offered as on a ‘one size fits all’ basis but if we are going to continue to build the advice profession we need to recognise the specialised nature of advice,” Kewin said.

“The education requirements for specialised advice should not be presented at a lower level, rather we are proposing that if advisers are required to study it may as well be in areas that are relevant to them and their businesses,” he added.

As part of its recommendations, the AFA has suggested that FASEA allow advisers who are aged 55 and over at the end of 2023 and do not have any relevant qualifications to remain in the industry if they complete a four subject Graduate Certificate by that date, but be subject to a sunset clause.

Under this clause, those advisers would be given ‘a capacity to practice’ until the end of 2029 at which time they would have to stop providing advice unless they opted to complete a full eight unit Graduate Diploma prior to that date.

AFA General Manager, Policy and Professionalism, Phil Anderson said this proposal recognised there was a high level of anxiety around completing an eight unit course among older advisers and sought to prevent the departure of a cohort of advisers.

“The sudden departure of this group of older advisers would have a detriment on the pool of mentors for younger advisers and a range of business consequences for the advisers themselves,” Anderson said.