New entrants into the financial advice sector will be required to gain a bachelor level degree that covers the technical aspects of financial advice as well as ethics, professional attitudes and behaviours.
The announcement finally confirms the requirements for new entrants, which were first raised in 2014 (see: Senate Report Recommends Higher Advice Education Standards), and have been welcomed by the AFA and FPA.
The new entrance standards were announced by the Board of the Financial Adviser Standards and Ethics Authority (FASEA) at its recent October meeting where it decided that a Bachelor level degree requirement would apply to new entrants from January 2019.
Relevant degrees would be made up of 24 units covering fields that include the financial planning and advice process, technical requirements of financial advice and ethics, professional attitudes and behaviours.
New entrants into advice who were changing careers would cover the same fields in their studies which would be undertaken at a post graduate level.
FASEA Chair, Catherine Walter said “In the first instance, to provide direction for employers, higher education providers and students, the Standards Authority will adopt the Financial Planning Education Council (FPEC) framework”.
The FPEC Framework was developed by the FPA in 2011 to create a curriculum for financial planning degrees and a process to approve university courses against this curriculum, and handed over to the advice sector in 2015.
“…the key task is providing clarity to existing advisers as soon as practicable…”
FASEA Chief Executive, Dr Deen Sanders said the requirements for existing advisers were still being developed but the standards for new entrants “…will help inform our work on the pathways for existing advisers” and FASEA was mindful of “…the need to clarify transition issues for those who need to meet their obligations by 1 January 2024”.
In welcoming the release of the new entrant requirements, the FPA stated the announcement confirmed FASEA will accept the FPA’s gift of the FPEC Curriculum and Approved Degrees list, and use this as the initial entry standard for new entrants into the financial planning profession.
FPA Chief Executive, Dante De Gori said, “This announcement recognises the great work and significant effort that the FPEC Committee and the tertiary education sector have put into developing these financial planning degrees, increasing education standards for new financial planners and ultimately increasing the professionalism of the financial planning profession”.
AFA Chief Executive, Phil Kewin said the degree requirement pathway for new entrants was “…an eminently sensible announcement and…is a positive beginning in providing certainty and direction for employers, education providers and of course those students aspiring to a career in financial advice”.
“This is the first step necessary to provide certainty to those wishing to join the profession. Of course the key task is providing clarity to existing advisers as soon as practicable,” Kewin added.
Why would you bother: 2 year claw backs, cost of compliance, ASIC targeting you at the behest of industry funds and their FSC puppeteers.
The concept of the highest possible education and knowledge based on a degree minimum requirement, is admirable and completely understandable for complete financial planning advice.
However, this is also an anchor that will weigh down the Life Insurance sector, as it is becoming increasingly harder, with higher risks / costs for Advisers who would like to continue working in the Life Insurance area and virtually impossible for new advisers.
The higher education lobby groups are always going to promote higher education, that is how they get paid.
The new reality, is many highly educated people working in low paying or part time jobs.
The fantasy of a degree being the saviour of all our woes and will solve all the problems, is just that, a fantasy.
What will happen, is more complexity, more cost with a lower return and a population that will still treat Life Insurance the same way.
I have met some incredible people with amazing skills without a tertiary education, that would not qualify to work in the Life Insurance space in the brave new world we are heading into now and highly educated people who will qualify though will fail due to their inadequate communication skills.
The result is still the same. Less people in the Industry that is crying out for more.
Agreed that its a long overdue step in the right direction – as opposed to letting someone loose to manage another’s life savings, armed just with a diploma that the’ve obtained in a week from a dodgy private college. Now let’s tackle an equally pressing issue – moving from selling products to actually formulating effective strategies – however with the big 4 banks and AMP controlling this industry, I would not hold my breath – there will be the usual cosmetic changes and mother hood press statements from these institutions but little else will change….
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