Westpac, AMP and the National Australia Bank (NAB) have all announced new, minimum education standards for planners working in their advice networks.
Westpac/BT
Advisers in the Westpac-aligned BT Financial Group advice business, which includes Westpac Financial Planning, St George Financial Planning, Securitor and Licensee Select, will soon need to hold a relevant degree qualification in order to maintain their representative status.
Under the new standards, all existing and new advisers must hold either a Certified Financial Planner (CFP), a Fellow Chartered Financial Practitioner (FChFP), or Masters in Financial Planning (MoFP) qualification within five years. Alternatively, and in recognition of the large number of accountants within the network, advisers can choose instead to hold a financial planning certification from one of the recognised accounting bodies.
A spokesperson for BT said the organisation believes these education levels should form the basis of industry minimum standards by 2019, and that it was committed to taking an industry leadership position on this issue.
BT’s Managing Director of Securitor and Licensee Select, Matt Englund, posted a YouTube message to advisers on 21 August to address the reasons behind the initiative.
Mr Englund said the introduction of increased adviser education standards had been on the agenda for a number of years.
“For as long as I’ve been part of the Securitor network, you’ve been telling me that the education standards for financial advisers are too low,” Mr Englund said in his video to advisers.
“Our message here is simple. We believe that all advisers who give personal advice to clients should be really, appropriately qualified, and RG146 isn’t going to cut it anymore.”
AMP
AMP has announced similar measures for its advice networks.
Using its half yearly profit update as a platform for the announcement, AMP advised that all new and existing advisers in the AMP network will be required to hold either a CFP, FChFP or MoFP qualification. New advisers will have five years to complete the qualification after joining an AMP licensee, while existing advisers will have until 31 December 2019 to complete the requirement.
AMP Group Executive Advice and Banking, Rob Caprioli, said by enabling advisers to choose between the CFP, FChFP and MoFP designations, all advisers across the AMP Group (including AMP Financial Planning, Charter Financial Planning, Genesys Wealth Advisers, Hillross, Horizons, ipac and smsf advice) would have access to relevant qualifications.
AMP will also develop an ethics and responsible decision-making program for financial advisers. The program will be developed in conjunction with the St James Ethics Centre, and will be available to all advisers from mid-2015.
NAB/MLC
Meanwhile, NAB’s wealth management arm, MLC, has introduced a degree requirement for its financial advisers.
New advisers recruited to NAB Financial Planning will be required to have a relevant degree qualification as well as an Advanced Diploma in Financial Planning, or be working towards completing this within three years.
Existing financial planners will be required to hold the CFP designation, or be working towards obtaining this designation. The group has given its existing advisers until 2017 to obtain the CFP certification, or a deadline of 2019 if incorporating a Masters degree along with the CFP accreditation.
In addition, all NAB financial advisers will continue to hold a membership with a recognised professional association.
NAB Wealth Group Executive and MLC CEO, Andrew Hagger, said the group strongly supported moves across the industry to lift education standards and boost transparency.
“With an ageing population that is living longer and facing a significant shortfall in retirement savings, the provision of affordable and trusted financial advice to help consumers secure their future is more important than ever,” he said.
He added that MLC was supportive of an enhanced national register of financial advisers.
“MLC has long championed transparent financial advice and a fee for advice model, and a stronger national register is another step in ensuring we are continually improving transparency across the industry,” Mr Hagger said.
The Commonwealth Bank was the first large institution to announce minimum education standards for financial advisers (see: CBA Commits to Adviser Associations, Education Benchmarks). To have your say on this issue, click here to contribute to our poll.
A lot of the misselling of financial products has come from people and professions with the highest standards of qualifications. The problem of poor financial advices is not down to qualifications per se but down to adviser honesty and product manufacturing integrity by the big financial firms. Products must be tested thoroughly not only initially but also on an ongoing basis before they are released to the market. They must perform how they should on the label with maximum transparency over fees and risks putting the client first. Suitability and appropriate testing by some firms of financial advisers is still not good enough. Some firms use pschyometric testing to assess client risk- these are pointless exercises and do not provide a satisfactory long term outcome for clients. Financial firms will always be profit driven where the bank comes first and client comes second. The best result for many investors would be choose a smaller firm who can actually provide a unique personal service with on-going continuity of adviser relationships. Whether an adviser has a CFP accreditation or a CFA is not really relevant in choosing who to deal with. We like to look an adviser in the eye and ask “will you really put us first”.
There is no doubt that there are advisers who need more education and knowledge is crucial to enable advisers to properly look after their clients interests.
However, all this education is going to add costs and more time away from being in front of clients, which is not a bad thing if your Business can afford it.
The way the world is heading, is down the path of instant gratification and the demand for instant results at the least price to pay, which is fine if you are buying a plate, though Insurance products are a bit more complicated than a plate and direct Insurance providers, which now include ( god help us ) Coles and the hundreds of others who have jumped on the band wagon, understand that fast and easy to set up is good, even if the product is rubbish.
So the end result will be highly educated broke advisers, unless the regulators make it a even playing field and bring these direct rogue Companies into line, as they are destroying peoples lives based on false expectations of a policy that will do nothing for them at claim time.
Financial planners who work in Investment and Insurance will find themselves highly educated with massive outlays and competitors who will do none of the work, yet gladly steal clients with no recourse.
It is a nice gesture of the Banks to demand higher education, however if they do not make it easy for advisers and clients to do Business, it could be a major cost for little return, while outflows continue at a rapid rate.
It’s all very well for senior managers to boast about how they are raising education standards within the industry. Ultimately, the problem is the ‘sell-at-all-costs’ culture which is pushed by bank boards and senior management to boost their own bonuses. The people facing the clients are the ones pressured to sell or else, yet they are blamed as the ‘rotten apples’. ASIC needs to focus on the people who are really responsible for client losses – the ones who get paid the most.
What a great announcement by these big corporations! For the CBA to come out and say we will be lifting the education requirements is the just a charade to allow them to keep trading-they should have lost their AFSL!! What the industry needs is honest people in the field of management! The planners are driven for results with FUM, Risk and revenue-this is how they are measured with their performance. Until a change to this is made, it won’t matter if you have CFP or not. The designation is irrelevant if we don’t change the greedy culture of the industry from a senior management perspective. I know heap of planners who have CFP and some of them are very ordinary planners! Let’s not believe these senior managers-they are still greedy and the CFP status will not change this!!
Westpac, AMP and the NAB have all announced new, minimum education standards for planners working in their advice networks. Whats really needed are supervised minimum ethical standards of practice for planners. The dilemma is that many of their managers seem to need it as well. What do you need to do to loose your AFSL now days? A lot it seems!
Great to see all the financial institutions in Australia collaborating on the best way to deal with the education of financial planners in Australia. If it wasn’t for them being so greedy we wouldn’t need to worry about the higher education requirements imposed on planners. This stems from big corporates judging all their planners on numbers only! They will tell you there are other factors to consider, but at the end of the day, the numbers have the majority of the weighting. Can this be changed? Advice is about understanding someone’s situation and providing strategies to help improve this.
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