New legislation aims to stop the ‘brain drain’ from Australia’s finance sector.

Financial advisers and organisations have just under two weeks to provide feedback on draft legislation aimed at recognising the experience of advisers and halting the loss of skilled professionals from the sector. 

The proposed legislation allows experienced advisers to be considered as having fulfilled education requirements if they meet two primary conditions; a minimum of ten years' cumulative experience in providing financial advice between January 1, 2007, and December 31, 2021, and no disciplinary actions recorded against them on the Financial Advisers Register before December 31, 2021. 

However, these advisers will still be required to pass the financial adviser exam.

Financial services minister Stephen Jones says the sector is bleeding experienced advisers due to the tougher qualification standards, leading to a decrease in available professionals to assist those in need of financial guidance. 

He says that over 10,000 advisers have left the sector, including some who were not suited to the new requirements and others who had left despite having no record of misconduct.

The proposed law also amends the current education requirements, allowing the minister to approve a qualification pathway to acknowledge different methods of training to become a financial adviser. 

The explanatory memorandum for the Bill clarifies that the flexibility permits the minister to determine alternative ways for a potential new entrant to show that they meet the conditions for an approved qualification if they are not evident from the person's course transcript. 

For example, if an individual has completed all the requirements for a financial adviser qualification except for one unit, such as business law, the draft Bill's provisions would allow them to complete the missing unit with a separate education provider, recognising that person's relevant study as meeting the approved degree's requirements for becoming a financial adviser.

Consultation on the draft legislation is accessible here.