The Commonwealth Bank has announced new minimum education standards for employed advisers and key staff operating within its Commonwealth Financial Planning (CFP) business.
In a statement released at the end of last week, CBA detailed what its minimum future educational standards and industry association membership requirements will be for its advisers and key staff.
The new standards state:
- All new CFP financial planners, recruited from 18 July 2014, must hold a degree in finance, business, commerce or a related field
- All new CFP direct supervisors or managers, recruited from 18 July 2014, must hold a degree in finance, business, commerce or a related field
- Existing financial planners authorised under the CFP licence and their supervisors will be required to hold either an Advanced Diploma in Financial Planning (or equivalent) or a degree in finance, business, commerce or a related field by 30 June 2017
- Existing Senior Financial Planners will be required to obtain the Certified Financial Planner certification with the Financial Planning Association of Australia
- CFP commits to making membership of a relevant financial services industry association a minimum standard required of all CFP financial planners by 30 June 2015
CBA has also confirmed to riskinfo that advisers authorised under both its Commonwealth Financial Planning and Financial Wisdom licences will be required to take out an industry association membership and the cost of that membership will be fully funded for those advisers who operate as employees.
This announcement follows the release by CBA earlier this month of details regarding a new review and remediation program it is implementing for customers impacted by poor advice delivered to them by advisers working for CFP and Financial Wisdom (see: CBA Apologises…).
What degree qualified Financial Planner or FP Exec in their right mind would want to join and work for CBA, let alone CFP – ever again? Best of luck with your recruitment…..
Why do formal education qualifications get trotted out yet again as the panacea to issues that seem to stem from the absence of the core qualities of “open communication” & the non negotiable values of integrity & ethics? Didn’t anyone take notice of the Beddoes / Zurich / AFA research around the “Trusted Adviser”???
Will this stop CBA pushing CFP advisers to flog their own product?
My my, CBA’s problem was with fraud and dishonesty. What will education do to stop the rogue adviser. They need to get their act together and monitor their advisers more actively. And listen to clients complaints.
That’s a pretty naïve comment. CBA and I would suggest the other Banks have indeed already got their acts together. Most if not all of senior and middle management found to be implicated in this scandal in addition to some of its planners were moved on in most cases years ago. The people running the show now are very good people with good ethical standards. Higher education standards may not the only answer but it’s hardly a bad thing either and I note that managers and not just planners will require higher standards and I think that is a particularly good thing. And improving education is not the only thing that is being looked at.
To think this is just a CBA thing is also just not the case. This problem has been ongoing for years now and there would be lots of other CEO’s ducking for cover right now and not just Bank CEO’s. This is not the end of the road with this. More to come, the media and the politicians are not about to let this go. But let’s acknowledge that CBA has at least acknowledged it has dealt with this poorly until recently and is moving to address those shortcomings.
Seriously, existing planners are required to become a CFP, this means for many having to go a complete a degree which could be entitrely irrelevant then complete their CFP which in many cases is studying stuff they already know. This means about another 6-7 years study for someone that may have been working as a planner for the last 10 -20 years that have significantly more experience and knowledge than many University Graduates that have only got a couple of years experience. Being a CFP or a member of the FPA does not make someone a more ethical or a better Financial Planner. This is not going to change anything other than make it more difficult for many of the existing planners that are doing the right thing in the first place.
My understanding is that the majority of all CBA advisers who were involved in this scandal were degree qualified. Qualifications are not the problem. Its the CULTURE
Its not just the culture, its the industry. The advice industry is structurally flawed and until products are removed from an advisers vocabulary, there will still continue to be conflicted advice regardless of qualifications. Advice is advice – it is not a sales industry anymore.
Spot on
I think everyone has their head in the clouds. How hard can it be? The previous government thought it appropriate to instigate a “lifestage” investment policy. Does this not indicate that it is time in an investment that makes all the difference. Buy and never sell…this is the only way to have enough certainty about your financial future. All the experts in the world have not consistently picked the market or continuously outperformed. Short term investment performance is a guess at best.
Yes certain aspects of our industry is Advice related, however there is not a personal in the world that would suggest insurance in bought…it’s not bought, it is a sales job whether you like it or not. If I choose to have the company reimburse me for my time and expertise, then I should have the option.
When having these debates, the industry needs to start referring to the specific aspects of the advice…i.e. Risk Advice. Investment Advice…because it is completely different. One deals with a financial product and the other deals with a financial asset.
Cheers
Narev, Norris, and CBA are treading the well worn route of blaming the planners and trotting out the furphy of higher education standards for planners being the panacea for the problem. In doing so they, successfully it appears, continue to hide the core problem – BANK CULTURE – and the senior executive remuneration system it is in place to support.
No that is wrong. No-one said higher education is a/the panacea at all but why is higher education such a problem. I’m nearly 65, still in the industry and still learning after nearly 50 years and still motivated. The sales culture models are a thing of the past. Move on or move out.
No FHFS, having worked for two of the majors wealth groups I can confirm that the banks ‘sales culture’ is far from dead. As recently as this week this was reaffirmed by an ex-colleague, still with one of the banks, who commented ‘planners are marginalised and reduced to direct sales people’. I also note my own son who has just turned 15 being sold a superannuation account by his local branch on the basis he had a part time job (5hrs pw) and earning $60pw. I, and most true advisers, are all for continuing education but for the CBA, and other bank’s to focus on this as the solution to ‘rogue planners’, without addressing the core cultural problem is self serving and misleading. Unfortunately it appears they are succeeding.
After 7 years as an adviser with one of the Big 4 Banks but it wasn’t CBA. I can say there are some awesome advisers in Banks but it can not be true advice until the banks open their Approved product Lists to the rest of the industry. They need to understand that the majority of insurance and investment will still flow into their products but by allowing an adviser freedom to recommend what is truly in the best interest of the client then unfortunately it will remain a Sales Job inside the Banks. This will also assist in address the Client Trust issue for the Banks when the day comes when a NAD planner recommends a Onepath insurance policy because it happened to be a better fit for the Clients needs then an MLC policy. IHMO
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