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Navigating the New Transitional Arrangements for Financial Advisers: The Experienced Provider Pathway

The “Experienced Provider Pathway” has been put in place to reshape the qualification requirements for existing financial advisers. The pathway removes the tertiary education requirement for existing financial advisers with a decade or more of experience and a clean disciplinary record.

Experienced Provider Criteria

To qualify as an Experienced Provider, an adviser:

  1. Must have held an Australian Financial Services (AFS) Licence or worked for an AFS Licence holder between 1 January 2007 and 31 December 2021;
  2. During this period, they must have been authorised to provide personal advice to retail clients about financial products (other than general insurance, consumer credit insurance products or basic banking products);
  3. Must have not ever been banned or disqualified from providing financial services.

 

Advisers must have met conditions 1 and 2 for a total cumulative period of 10 years between 1 January 2007 and 31 December 2021.

The Experienced Provider Pathway

An adviser who wishes to rely on the new arrangements should take the following steps:

Eligibility Condition: An adviser must have passed the financial adviser exam by either 1 January 2022, or 1 October 2022 (if the adviser had previously sat and failed the exam twice).

Step 1: An Experienced Provider must make a written self-declaration to their current AFS licensee to confirm they meet the Experienced Provider criteria. The only requirements for the declaration are that it confirms that the adviser meets the definition of Experienced Provider and that it be in writing. The form of the declaration can be determined between the adviser and the AFS licensee.

Step 2: From 1 July 2024, the AFS licensee must lodge a notice on behalf of the Experienced Provider to ASIC, via the ASIC Connect portal. This notice should include the Experienced Provider’s name and principal place of business, along with a written statement confirming the provider meets the Experienced Provider criteria.

Timing of Notice Submission

Date of Experienced Provider’s Self Declaration

Timeframe for lodgement of Notice with ASIC

Prior to 1 July 2024

Within 30 business days after 1 July 2024

After 1 July 2024

Within 30 business days of the date the self-declaration is provided to the AFS licensee

 

There is no deadline to make the declaration or lodge the notice with ASIC. However, it’s important to note that advisers who passed their exam by either 1 January 2022 or 1 October 2022 (whichever is applicable to the adviser) are required to meet the financial adviser qualification standards by 1 January 2026. Therefore, if an Experienced Provider wants to keep providing personal advice after 1 January 2026, they will need to make the declaration to their AFS licensee before 1 January 2026.  Otherwise, they will need to or cease providing personal advice to retail clients from this date until the standards are met. 

Action Items for Licensees

In addition to receiving the declaration and lodging a notice with ASIC, AFS licensees should also verify any declarations received from their advisers. This means, the AFS licensee will need to verify:

1.    The length of the adviser’s experience – this can be done via ASIC’s Professional Register and the Financial Adviser Register;

2.    That the adviser has not been banned or disqualified – this can be done via ASIC’s banned and disqualified register.

3.    That the adviser passed the exam by the due date – this can be checked via the Financial Adviser Register.

Further declarations?

Where an adviser moves from one AFS licensee to another, the adviser must ensure they provide a copy of their declaration to the new AFS licensee. The new AFS licensee may require the adviser to make another declaration, in the form which the AFS licensee has determined is appropriate. ASIC recommends that advisers keep copies of all declarations made to their authorising AFS licensees.

Background:

Since 1 January 2019, all financial advisers (advisers) have been subject to specific education and training standards to provide personal advice to retail clients. This includes having an approved bachelor’s degree or higher, or equivalent qualifications.

Further Reading:

Check our our Compliance Portal

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