The implementation of the experience pathway could be “destructive” for the financial adviser industry if it is implemented incorrectly, according to the Association of Financial Advisers (AFA).
In a submission to Treasury, AFA chief executive, Phil Anderson, said there had been diversity of opinion among members on the topic. The proposed pathway would see advisers without degrees but with more than 10 years of experience exempt from the education requirements and only required to complete an ethics module.
“There are some very strong opinions at each end of the spectrum, and this matter could become quite destructive, if it is not managed carefully,” the organisation stated.
Speaking to Money Management, he added: “The financial advice profession is struggling with the consequences of the Government’s education proposal. Whilst there is strong support for increased recognition of prior learning and experience, there are also many who are passionately concerned that the Experience pathway will undermine the recognition of financial advice as a profession. They are not just arguing this point from the perspective of today, but also in terms of what the public will think in five or ten year’s time”.
Out of AFA members who responded to the organisation’s survey, just over half supported the proposal but 25% felt the Government “had gone too far” and 22% said it would undermine community recognition of financial advice as a profession.
The AFA’s recommendation was for graduated pathway instead which would be phased depending on years of experience as detailed in the chart below:
Anderson said: “We have proposed an outcome where all advisers will be tertiary qualified and therefore we can firmly claim recognition as a profession. FASEA based their model around the eight subject Graduate Diploma.
“We believe this could have been based on the four subject Graduate Certificate for experienced advisers and are arguing for this change to be implemented. We are also recommending that the more experience an adviser has, the more credit they should get.”
A separate matter raised by the association with Treasury was the view that the experience pathway for people who had been advisers for the 10 of the last 12 years might be “discriminatory” as it could exclude those who had taken long periods of leave or worked part-time, which was often female advisers with children.
“An adviser who has had two children in the last 10 years and returned to work on a part-time basis for a period of time, would really struggle to achieve this criteria. It is also potentially discriminatory to those who work part time. This would exclude anyone who has worked four days a week for the last 12 years (9.6 years full-time equivalent).
“We do not believe that this is the intention of this policy and therefore warrants review.”
