The consultation paper on the education standards proposed reducing the the current 11 core knowledge areas down to five, which would include taxation law, commercial law, financial advice regulatory and legal obligations, ethics and professionalism, and behavioural finance and client engagement.

In its submission, ISA stated that the eleven knowledge areas established by FASEA were considered a knowledge baseline for an adviser to represent to consumers that they are component to provide advice.

“From the perspective of consumers, a financial adviser is authorised to provide financial advice across a range of areas. The legislation does not provide for sub-categories of financial adviser depending on an adviser’s area of expertise or speciality,” it stated.

“This is consistent with professions such as law where a lawyer who has chosen to specialise in commercial law must have undertaken a law degree which incorporates areas of study not necessarily relevant to their practice [such as] criminal law for example.”

The submission argued that there can be inherent benefits in financial advisers having and maintaining a broad knowledge base because of their inter-related nature of these topics.

“For these reasons, ISA opposes the proposal to streamline the core knowledge areas from eleven to five,”it stated.

“It is not clear what the policy rationale is for this proposal. The only justification given is that a broader range of degrees will become eligible as entry pathways to the financial advice profession.”

The submission stated that the five knowledge areas appear to leave out all the areas that go to the core services provided by a financial advice and seem to focus more on compliance.

We are particularly concerned with the removal of superannuation and retirement planning as a core knowledge area given that superannuation is compulsory and therefore is a part of the financial purview of every Australian worker.

The submission noted that ASIC Report 627 Financial Advice: What Consumers Really Think, based on research ASIC commissioned in 2019, found that the most common topics that survey participants said they had either received, or were interested in receiving financial advice on, were investments, retirement income planning and growing their superannuation.

“The consultation paper proposes to remove all of these topics from the core knowledge areas,” it stated.