Today’s announcement of the changes to the new entrant pathway for financial advisers ensures the future of the advice profession, notes Stockbrokers and Investment Advisers Association (SIAA).
“We welcome the government’s announcement of a move away from the failed approach to the education pathway into the profession of financial adviser,” said SIAA CEO Judith Fox. “We are on the record over some years as calling for a more flexible pathway, having seen the current framework collapse the pipeline into the profession by locking out both new graduates and professional mid-career changes with excellent degrees suited to the adviser role who are currently considered unqualified.”
“Having highly suitable degrees in finance, commerce, business and economics from Australia’s top universities dismissed under the current framework has seen those wishing to work in investment advice turn away from their chosen profession,” commented Ms Fox. “The result has been a replacement rate of one per cent, with approximately only 150 new entrants across the entire financial advice ecosystem year on year. This is not even sufficient to match the numbers retiring from the profession. As a result, the number of financial advisers continues to decline at a time when more and more Australians need access to professional advice.”
The government’s proposal ensures the sustainability of the profession. It recognises that a degree is the just the first step in becoming a fully qualified financial adviser. New entrants must complete the Professional Year, with its 100 hours of training and supervision by an experienced adviser, as well as sit the professional standards exam before they can take on qualified adviser responsibilities. They also then have 40 hours per year of continuing professional development.
“Our sector will once again be able to attract the best and brightest from the top universities,” said Ms Fox. “The profession will be able to offer a high degree of quality in the advice role.”
“In stockbroking and investment advice, new entrants straight from university will not face a client for some years, given they will rotate through roles in research, corporate advisory and back office, for example, before commencing the Professional Year, in order to gain a full understanding of capital markets and the investment landscape.”
The government’s proposed changes also facilitate greater diversity in the profession, by ensuring that experienced professionals seeking a career change can utilise their existing degree. “This is particularly important for female mid-career professionals,” said Ms Fox. “With women making and inheriting wealth in increasing numbers and research showing that women frequently prefer to see a female adviser, the need to attract women to the profession is vital.”
Contacts:
Judith Fox, CEO Michelle Huckel, Policy Manager
0408 667 246 0402 096 012