ASIC’s ‘final warning’ shows 15% of advice industry at risk

Ahead of the 1 January 2026 education deadline for advisers, ASIC has issued its ‘final warning’ to the industry, reporting that more than 2,300 relevant providers could be on their way out.

In accordance with the Corporation Amendment (Professional Standards of Financial Advisers) Act passed in 2016, individuals who are unable to meet the experience pathway criteria and wish to continue operating as an adviser past 30 December 2025 are required to meet higher minimum education and training standards to continue as a financial adviser.

With the deadline looming, ASIC is urgently urging the profession to:

• Ensure that they meet the education and training requirements,
• Review the accuracy of their information recorded on the Financial Advisers Register, and
• Ask their AFS licensee to notify ASIC of their qualifications, or if eligible, that they are relying on the experienced provider pathway.

Looking at a point-in-time assessment of the Financial Adviser Register (FAR), the regulator said there were 15,469 relevant providers on the register as of 20 November, 7,959 of which have indicated they hold an approved degree or qualification.

A further 4,212 have said they are relying on the experienced provider pathway, 972 of which also hold an approved degree or qualification.

Based on their FAR status, this leaves 2,326 relevant providers who are yet to meet the new standards, meaning that up to 15 per cent of the profession could exit in the coming weeks.

However, the regulator said that 836 of this cohort may be eligible for the experienced provider pathway but are yet to notify ASIC, reiterating the need for AFSLs to ensure records are up to date.

ASIC also note that some 827 relevant providers that are also existing providers will need to complete the specified courses in commercial and taxation law to continue providing tax financial advice services past this deadline, unless exempted.

In preparation for the deadline, the regulator said that, for those who won’t meet the requirements in time, AFSL "should consider ceasing their authorisation on or before 31 December 2025 to avoid consequences to the existing provider status”.

“In accordance with the legislation, if the relevant providers remain authorised and their authorisation ceases by operation of law on 1 January 2026, they will be required to compete a professional year and obtain an approved degree or equivalent qualification set out in Schedule 1 of the Corporations (Relevant Providers Degrees, Qualifications and Courses Standard) Determination 2021 before they can provide personal advice to retail clients again. They will be unable to meet the qualifications standard by accessing the existing provider pathways as set out in Part 3 of the determination.”

On top of this, individuals that do not meet the requirements but do remain on the FAR past the deadline will also be required to complete a professional year (PY) before they can rejoin the register.

While many are pushing to complete their studies in time, those who won’t finish in time have been encouraged to drop off the FAR in December and return once they meet the new requirements.

On a webinar in August, the Financial Advice Association Australia (FAAA) flagged this loophole which will allow advisers close to completing their studies to avoid redoing the PY.

At the time, FAAA chief executive Sarah Abood said the organisation was predicting losses of around 1,000 as a result of the new standards. While data from the FAR showed that more than 4,000 advisers didn’t qualify for either pathway, Abood said, “We don’t think that’s the reality”.

As the deadline creeps closer, however, anxiety regarding the potential loss grows.

Just last week, Padua Wealth Data’s latest industry analysis saw founder Colin Williams predict there could be up to 1,600 advisers leaving, stating that a loss of 900 advisers could be the “best case” scenario.

Williams said: “Adding together the most realistic outcomes across all categories, the net loss range will be between 1,100 and 1,500."

After the staggering blow of the royal commission that saw the profession lose almost half its numbers in 2018, the profession has struggled to maintain its forces which have sat around the 15,500 mark.  

While Williams said there are a number of factors that could push the potential losses down, he warned that another exodus would exacerbate existing capacity issues for the profession, driving up advice delivery times for clients and putting further pressure on the cost to serve.