Advisers lean on AQF7 to meet education standards: Rainmaker

A new report indicates that Australian Qualifications Framework (AQF) 7 qualifications are the most common forms of qualification among financial advisers, held by 85% of the population.

Taking into account the new professional standards reforms, which came into effect at the beginning of the year, Rainmaker found that an AQF 7 or higher qualification were the most popular.

AQF 7 stood as the minimum requirement for advisers to continue practising, unless qualified through the experience provider pathway, which recognises long-tenured advisers with a clean record.

According to Rainmaker's Financial Adviser Report for the June quarter, licensees are viewing AQF 8 as the benchmark for advisers moving forward.

The Graduate Diploma (AQF 8) is the most common highest qualification, held by 35% of advisers.

Of all advisers on the register, 13% sat below AQF 7, and 2% had no mapped formal qualification. Within that group, licensees reported 1967 advisers on the experienced provider pathway and 246 more with the pathway plus a marked qualification.

Notably, a lower recorded education level is not evidence of non-compliance.

Rainmaker noted the pathway to reaching these standards is now shrinking, as platforms and dealer groups "competing for adviser share can segment on route."

"... pathway-reliant books skew senior and will retire out, while the approved-qualification cohort is the durable base," the report said.

Additionally, since ASIC commenced its review of the Financial  Advisers Register (FAR) in February, 132 individuals were identified as not having any qualifications or training courses marked from some 82 Australian financial services licensees.

Of those individuals, 106 records on the FAR have been updated to reflect they are, in fact, qualified, while 26 have had their authorisation ceased.

Additionally, the financial adviser exam, which is a separate requirement, saw 746 advisers leave the register permanently in January 2022 when the requirement became effective. The number represented roughly 10 times the usual monthly exit count, the report said.