The Government is to change the education requirements for professional financial advisers, whose number has dropped from 28,000 in 2019 to less than 16,000 today.
Stephen Jones, Assistant Treasurer and Minister for Financial Services, says the current education pathway is not sustainable.
“School leavers are not attracted to the specialised area of study, and it is a significant investment for career changers,” he says, adding “Fewer higher education providers are offering courses due to the lack of entrants.”
Jones, who announced his resignation in January, says his proposed changes will centre on a new requirement for advisers to hold a bachelor’s degree or higher in any discipline.
“Prospective advisers will need to meet minimum study requirements in relevant financial concepts such as finance, economics or accounting,” he says.
They will also need to complete financial advice subjects covering:
- Ethics
- Legal and regulatory obligations
- Consumer behaviour
- The financial advice process
“This provides relevant core knowledge for an adviser, streamlines entry into the industry and retains the important role of tertiary education,” says Jones.
…the cost and time to meet the requirements under the new standard will be halved…
“It will also bring down the costs on prospective advisers and make it easier for people to change careers into financial advice later in life.”
“For most students studying a commerce, economics or finance degree – or people moving across from other financial services careers – the cost and time to meet the requirements under the new standard will be halved.”
Jones says advisers will still need to complete a professional year, pass the financial adviser exam and undertake ongoing continuing professional education:
“These reforms will complement the education requirements for the new class of financial advisers,” says Jones. “We will ensure the pathway is aligned to enable the new class of adviser to transition into the professional advice ranks.”
He says Government will work with industry and higher education providers to ensure an “appropriate transition to the new education standard”.
FAAA chief, Sarah Abood, cautions details such as the timing, arrangements for current students, and any impact on existing financial advisers working to meet the education standard by the deadline of 1 January 2026, are yet to be released.
“It is critical to the future of the profession that more people choose a career in financial advice and, as part of this, it needs to be easier for commerce, economics and finance students from all universities to become financial advisers,” she says.
Meanwhile, FSC CEO, Blake Briggs, says the current education standards are unnecessarily restrictive, creating barriers for both aspiring advisers and existing professionals trying to meet the requirements.
“These rigid standards have contributed to a critical shortage of financial advisers, with new entrants to the profession declining from almost 5,000 in 2018 to just over 500 in 2024,” he says.
Stage 2 Registration
The Government will no longer proceed with Stage 2 of the registration process for financial advisers established by the Better Advice Act. This stage would have required individual advisers to register annually with the Australian Securities and Investments Commission from 1 July 2026.
“Financial advisers are already registered by their authorising Australian Financial Services licensees under Stage 1. Not proceeding with Stage 2 removes unnecessary red tape on individual advisers,” says Jones.
“These reforms build on the Government’s Delivering Better Financial Outcomes package to help address the current supply shortage of financial advisers, cut red tape that is not leading to better consumer outcomes, and strengthen the industry’s ability to meet the future demand for financial advice,” he says.
See also: Renewed Push to Attract New Advisers.
I remain totally unconvinced as to how these requirements for ALL advisers will bring people into this industry who want to be life risk specialists.Yes there should be some qualifications around the four essential criteria he has named but how units in economics and markets can be any advantage to someone who specialises in life risk has yet to be explained to me. I'm sure a few will try though.
According to stats from somewhere, and there were always dodgy, let's face it, there are supposedly around 580 life risk specialist advisers left in the industry. That's a very low number and the evidence is that it's gone down to that level because of all of the changes made to the life insurance industry starting with LIF and a compliance mad ASIC
The AI0FP he has for some time been advocating for life risk Specialists to be taken out of the all-encompassing adviser regulatory and qualifications environment favoured by ASIC. Such a move would recognise that being a specialist life risk advisor operates is an entirely different world to being an investment adviser, starting with the fact that clients don't walk in your door with a fist full of dollars and a desire to spend.
Where to start with this Old Risky? Yes, I too have been shouting exactly this over the past many, many years but only your good self and 2 or 3 others have shown any real understanding and concern on these points you mention, that I could tell. Seems every article we read from whichever masthead (exception: RiskInfo – most of the time) simply refers to ALL advisers only as "advisers" – no 'risk' or 'investment planning' delineation. Just smacks the head of reality for industry folk to speak and write like this. In effect, just like Stephen Jones, they're pretending riskies don't even exist,
Regarding the 580 remaining riskies you mention – I'm quite surprised there are still that many. My pontificating and calculating over the last few years put the number at zero (or close to) by end of 2026. Are we on track – who knows? I think we are because as we approach the witching hour the numbers will probably drop off a cliff, no doubt they're planning their exits now if they're smart. I'm talking about stand-alone riskies, not the type who subsidize the now pathetic risk commission with investment fees.
It can't go any other way that I can see – a risky can't build or even sustain a business and bring in new young people with those beyond pathetic commissions. The bulk of your 580 must simply be biding their time. The new people can't be remunerated to the point where they maintain an interest in the work. I do hope the life company execs are happy now, for sitting on their hands when demands from all quarters sounded out to lower commissions and then overnight allowing the concept of 'reward for effort' to evaporate.
I always believed it was a setup – 100% or 60%, why does the difference matter if all companies pay the same? The twisting excuse was a ruse but the executive bonuses were real! They're probably still getting bonuses, albeit reduced but most of the bad actors are now gone. Just disgusting what these people did to their very own industry and so-called partners/colleagues – the risk specialists.
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