Treasury has released draft legislation to create an ‘experience pathway’ for advisers who have at least 10 years’ industry experience and a clean disciplinary record and to fix some of the issues with the education standards. The draft is currently open for consultation until 3 May 2023.
We know this is a controversial topic for many of you, with a number of experienced advisers having invested significant time and money into an approved degree already. At the same time, those who have sold their advice businesses in reliance on the education standards being here to stay are also likely to be vexed over the introduction of the experience pathway.
We will stay like Switzerland and provide you the facts so you can work out whether to have any input into the current consultation.
As currently drafted, the experience component would replace the need for qualifying advisers to complete an approved qualification (or specified course/s) by 2026 and, for anyone re-entering the industry, the training standards that apply to new entrants.
Under the proposed draft, any adviser:
- authorised to provide advice for at least 10 years (doesn’t have to be consecutive) during the period 1 January 2007 – 31 December 2021
- that has a clean disciplinary record during the above period and
- who has passed the exam
will be eligible to qualify as an experienced provider.
This paves the way for advisers who have previously left the industry to re-join, as long as they can meet the above criteria (importantly the adviser exam).
As for the clean disciplinary record, this means that the adviser mustn’t have been banned or disqualified, and not given an undertaking in the period 1 January 2007 and 31 December 2021. It is unclear what implication an undertaking or banning order after that period will have!
The legislation sets out the process for advisers to rely on the experience pathway, which involves making a self-declaration to their licensee and lodging a notice with ASIC. For advisers who are currently on the financial adviser register (i.e. existing providers who have passed the exam and have until 1 January 2026 to complete their qualifications), the notice will need to be lodged within 30 business days after 1 January 2026. For any advisers that are re-entering the industry (not currently on the FAR), they must submit the notice within 30 business days after becoming a relevant provider (which first requires the exam to have been passed).
The draft legislation also sets out:
- Changes to fix some technical issues with the qualification requirement for new entrants. End result: greater flexibility for new entrants to demonstrate that they meet the requirements but will require ministerial approval on a case-by-case basis which appears to still be a little clunky.
- Changes to bring registered tax agents within the definition of ‘qualified tax relevant provider’ as well as changes to the education requirements for registered tax agents to remove duplication. End result: registered tax agents can provide tax (financial) advice without having to meet further education requirements.
Anyone can submit responses to the consultation. You can find information on how to respond, as well as copies of the draft legislation and explanatory materials on Treasury’s website.