The federal government is backtracking on one key financial adviser education requirement by scrapping the list of approved qualifications and proposing to allow any bachelor's degree or higher.
Assistant treasurer Stephen Jones has announced the proposed change – which calls for a bachelor's degree or higher across any discipline – will amend one of the four key pillars of becoming a financial adviser.
"Prospective advisers will need to meet minimum study requirements in relevant financial concepts such as finance, economics or accounting. They will also need to complete financial advice subjects covering ethics, legal and regulatory obligations, consumer behaviour and the financial advice process," he said.
They will still need to complete the Professional Year's 1,600 hours, pass the financial adviser exam, and undertake continuing professional education.
Currently, prospective advisers must complete a qualification from an approved list that is specifically focused on financial advice.
In December, major institutions – the University of Wollongong, Queensland University of Technology, and University of Tasmania – were ditching their approved financial advice courses due to poor enrolment numbers.
Mr Jones said the reforms will complement the education requirements for the new class of financial advisers (NCAs).
"We will ensure the pathway is aligned to enable the new class of adviser to transition into the professional advice ranks. The government will work with industry and higher education providers to ensure an appropriate transition to the new education standard," he said.
Since the Hayne Royal Commission, the number of advisers dropped from 28,000 in January 2019 to fewer than 16,000.
"The current education pathway is not sustainable. School leavers are not attracted to the specialised area of study, and it is a significant investment for career changers. Fewer higher education providers are offering courses due to the lack of entrants," he said, reported Financial Standard.