The Government has delivered on its election commitment to better recognise the experience of existing financial advisers with the Treasury Laws Amendment (2023 Measures No.3) Act 2023 receiving Royal Assent on 20 September 2023.
Existing financial advisers with extensive industry experience and a clean disciplinary record are no longer required to complete an approved qualification by 1 January 2026, if they make a self-declaration and pass the Financial Adviser Exam.
Importantly, this does not change the education requirements to provide tax (financial) advice services. Therefore, financial advisers who are eligible for the experienced provider pathway may still be required to complete some study before 1 January 2026 to continue to provide tax (financial) advice services from that date.
Qualification standard
The Adviser Professional Standards, which commenced on 1 January 2019, require all relevant providers1 to meet certain education and training standards. This includes a qualification standard requiring completion of a bachelor or higher degree, or equivalent qualification approved by the Minister.2
For ‘existing relevant providers’, i.e. those authorised to provide personal advice to retail clients at any time from 1 January 2016 to 31 December 2018 (and who were not subject to a banning order or enforceable undertaking on 1 January 2019), transitional arrangements exist. As outlined in our previous article, these arrangements allow existing financial advisers to continue to provide financial advice until 1 January 2026, after which the qualification standard must have been met to continue to provide advice.
The new legislation introduces an additional transitional arrangement for existing relevant providers - those who meet the definition of an ‘experienced provider’ will not be required to undertake further study to meet the qualifications standard.
Experienced providers
An ‘experienced provider’ is defined as an individual who:
- between 1 January 2007 and 31 December 2021 was authorised to provide personal advice to retail clients on financial products, other than general insurance products, consumer credit insurance and/or basic banking products (post 1 July 2012), for a total cumulative period of 10 years (that is, 3,650 days); and
- has a clean disciplinary record as at 31 December 2021, i.e. has never been subject to a banning order or enforceable undertaking before this date.
Accessing the experienced provider pathway
Financial advisers who wish to rely on the new transitional arrangement must make a written declaration (generally to their licensee) to confirm they meet the definition of an experienced provider. A copy must be given to a new licensee if a financial adviser moves licensees.
Criminal and/or civil penalties apply for giving false or misleading information.
Impact on the Financial Adviser Register (FAR)
From 1 July 2024, licensees will be required to lodge a notice with ASIC regarding self-declarations they have made, or received. Upon receipt of such a notice, ASIC must update the FAR to reflect that the financial adviser has declared that they meet the criteria for an experienced provider.
For experienced providers who are licensees:
- the notice to ASIC must include the experienced provider’s name and principal place of business, and a written statement that they have met the definition of an experienced provider
- if the self-declaration is made before 1 July 2024, a notice must be lodged with ASIC within 30 business days after 1 July 2024, otherwise a notice must be lodged with ASIC within 30 business days after making the self-declaration.
For experienced providers who are not licensees:
- the notice to ASIC must be lodged by each authorising licensee after receiving the self-declaration
- the notice must include the experienced provider’s name and principal place of business, and a written statement that the licensee has received a copy of their self-declaration
- if the licensee receives the self-declaration before 1 July 2024, the licensee must lodge a notice with ASIC within 30 business days after 1 July 2024, otherwise the licensee must lodge a notice with ASIC within 30 business days after receiving the self‑declaration.
Importantly, if an adviser intends to rely on the experienced provider definition, and does not make a self-declaration before 1 January 2026, they must be removed from the FAR, impacting their ability to provide personal advice to retail clients from that date. However, these advisers can be reinstated once they make a self-declaration and the licensee has lodged a notice with ASIC.
Other issues to consider
Adviser exam
As with all financial advisers, an experienced provider also needs to meet the requirements of the exam standard.
This means that a person will not be eligible to access the experienced provider pathway if they did not pass the exam and remained authorised to provide financial advice on their exam cut-off date (either 31 December 2021, or 30 September 2022 if the relevant provider had sat and failed the exam twice).
However, persons who left the industry before their exam cut-off date, can return at any time. They can still access the experienced provider pathway once they have sat and passed the financial adviser exam.
Education requirements for tax (financial) advice services
From 1 January 2023, relevant providers are required to be registered as a Qualified Tax Relevant Provider (QTRP) with ASIC, in order to provide tax (financial) services to clients.
Financial advisers who did not meet the ‘deemed registration’ process3 for QTRPs are required to complete specified courses in commercial law and taxation law, as outlined in the Corporations (Relevant Providers – Education and Training Standards) Determination 2021. Transitional arrangements apply to existing relevant providers who were registered on the FAR immediately prior to 1 January 2022, and who passed the adviser exam by their exam cut-off date. These financial advisers have until 1 January 2026 to meet the QTRP education requirements.4
Importantly, the QTRP education requirements are separate from the qualification standards (outlined above) and eligibility for the experienced provider pathway does not reduce any obligations to meet the education requirements to become a QTRP. As such, experienced providers may still have education requirements to complete before 1 January 2026 to continue to provide tax (financial) advice services from this date.
