A proposed overhaul of education requirements for life insurance and other financial advisers has been detailed in a federal Treasury consultation paper released today. 

The new qualification standard contains three requirements: a bachelor’s degree or higher; four financial concept subjects such as insurance planning; and four accredited financial advice subjects.

Treasury says other professional standards – completion of the financial adviser exam, professional year and continuing professional development requirements – will remain. 

“The current qualifications standard is complex and lacks flexibility and has not been effective in supporting a sustainable pipeline of new financial advisers entering the profession,” the consultation paper says. “It is unattractive to school-leavers due to the restrictive career path and requires a significant investment in study for career-changers.”

Under the current arrangement, new advisers are required to cover 11 core knowledge areas, including three bridging units and technical competency areas, and have a bachelor’s degree.

Financial Services Minister Daniel Mulino says the changes will “create a sustainable and flexible pathway for new advisers to enter the profession … to help address the decline in the number of advisers over recent years”.

Council of Australian Life Insurers CEO Christine Cupitt says the industry supports creating more pathways for people to become financial advisers.

“This needs to happen, and it needs to happen quickly,” she told insuranceNEWS.com.au.

Ms Cupitt says the proposed overhaul is an “important step in the right direction, but we continue to urge the government to pursue its financial advice reforms in full so that Australians can access the kind of advice they want, when and where they want it”.

The life industry has been pushing for progress on government plans to create a new class of adviser to provide so-called simple advice.

“Australians want advice that is simple, accessible and affordable. It’s not too much to ask,” Ms Cupitt said.

A CALI report, also released today, says three in five people would trust financial advice received from AI programs such as ChatGPT.

“We can’t leave Australians with no other option but to put their financial future in the hands of an AI chatbot,” Ms Cupitt said.

Financial Advice Association Australia says only 464 advisers entered the profession last year.

“Clearly, we need to substantially increase the number of new entrants … We are very pleased to see the government has heard these concerns and is acting with its consultation announced today on education reform for financial advisers,” association CEO Sarah Abood said.

The closing date for submissions is April 17. See the paper here.

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