Qualification, exam and professional development
From 1 January 2019, new education and training standards apply to financial advisers as part of the professional standards for financial advisers.
The Minister will implement and oversee these professional standards.
For an overview of how the standards affect Australian financial services (AFS) licensees and financial advisers, see How the reforms affect you.
For dates for financial advisers and AFS licensees to comply with the professional standards, see Timeline for the reforms and Information Sheet 260 FAQs: Timeframe for passing the financial adviser exam (INFO 260).
Qualification and training courses
See Treasury's Financial Adviser Standards website at fas.treasury.gov.au for detailed information on the education requirements for:
- financial advisers who are existing providers
- new financial advisers.
Financial advisers who are existing providers
Financial advisers who are existing providers must bring their qualifications up to an approved degree or equivalent level to meet the education requirements.
They must have an approved bachelor's degree (AQF7 level) or above or equivalent. The maximum requirement is an approved graduate diploma (AQF8 level) comprising eight subjects.
Depending on their current qualifications, an existing financial adviser may only do bridging courses, such as a bridging course about the Code of Ethics (if it was not included in their qualification).
See Treasury's Financial Adviser Standards website at fas.treasury.gov.au for a list of approved degrees and equivalent qualifications. This list includes current and historical approved degrees and courses, and is updated as additional courses are approved.
New financial adviser
For new financial advisers, the minimum education requirement is an approved bachelor’s degree (AQF7 level) comprising 24 subjects, or above or equivalent.
Where a new financial adviser already holds an appropriate qualification, they can meet the education standard by attaining an approved graduate diploma (AQF8 level) comprising eight subjects.
AFS licensees
AFS licensees must update the Financial Advisers Register when the financial advisers they have authorised complete the approved qualifications.
Financial adviser exam
Financial advisers who are existing providers and new financial advisers must pass the financial adviser exam to comply with the professional standards.
The exam tests the practical application of an adviser’s knowledge in three competency areas:
- financial advice regulatory and legal requirements, including obligations under Chapter 7 of the Corporations Act 2001, the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, the Privacy Act 1988 and the Tax Agent Services Act 2009
- financial advice construction – that is, suitability of advice aligned to different consumer groups, incorporating consumer behaviour and decision making
- applied ethical and professional reasoning and communication, incorporating the Financial Planners and Advisers Code of Ethics 2019 (Code of Ethics).
A new financial adviser (i.e. a person training to become a financial adviser) must pass the exam:
- after they have completed an approved degree
- before starting the third quarter of their professional year
For information on the exam, including how to book to sit the exam, see financial adviser exam.
Professional year and the new financial adviser requirements
From 1 January 2019, a person training to become a financial adviser must do a professional year before they are fully qualified (professional year standard). This is also known as the year of work and training. A person training to become a financial adviser is referred to as a ‘new financial adviser’.
The professional year is one year full time – equivalent to 1,600 hours. At least 100 of these hours must be structured training. The person works with a supervisor and their AFS licensee to establish a professional year plan.
A person can start this professional year while they are in the final stages of completing their approved degree. They must however have completed the approved degree and passed the financial adviser exam before starting the third quarter of their professional year.
When they have passed the exam and are authorised by an AFS licensee to provide personal advice on relevant financial products to retail clients, they can call themselves a ‘provisional relevant provider’.
An AFS licensee must appoint (add) a provisional financial adviser to the Financial Advisers Register.
Continuing professional development (CPD) requirements
From 1 January 2019, financial advisers must comply with the CPD requirements set by the Minister (see Treasury's Financial Adviser Standards website at fas.treasury.gov.au), rather than the CPD requirements in Regulatory Guide 146 Licensing: Training of financial product advisers (RG 146). The CPD standard involves financial advisers completing 40 hours of CPD each year, of which 70% must be approved by their AFS licensee.
Annual CPD activities include development programs and activities to maintain and extend financial advisers' professional capabilities, knowledge and skills. This includes keeping up to date with all regulatory, technical and other developments relevant to professional financial advice.
A financial adviser (or their AFS licensee) must:
- keep complete and accurate records of their CPD activity
- be able to provide a copy of these records to their AFS licensee on request.
See Treasury's Financial Adviser Standards website for further information on the CPD standard.
An AFS licensee must update the Financial Advisers Register if a financial adviser it has authorised fails to comply with the annual CPD standard.