December 6, 2018
New education standards being put forward by FASEA will be disadvantage female, part-time, and older advisers who will not be able to both work and study, according to the chair of a top five licensee.
Synchron Chair, Michael Harrison said while the proposed changes appear reasonable for full time advisers they would be difficult to achieve within the time-frame set by FASEA for those who did not have a full-time workload but would still be required to deliver high quality advice.
“We believe advisers who work part-time and flexible hours will not be able to complete the required study within the time-frame FASEA is proposing and still maintain a high standard of service to clients,” Harrison said.
“We recognise that financial advising is attractive to women who want to balance their work and family commitments, particularly those who want to run their own businesses and believe the proposed requirement will therefore have a disproportionately negative impact on female advisers,” he added.
Harrison was also critical of a lack of recognition of experience in the standards, as well as the lack of differentiation between risk only advisers and other advisers, and an implementation timeframe which he labelled ‘unrealistic and unfair’.
He said the new standards would also have an adverse impact on older advisers who had experience and skills but no formal qualifications, and that it was unreasonable for FASEA to impose its current time-frames on compliance with the standards after the length of time it took to release them.
“FASEA has taken 18 months to determine draft standards and yet has not commensurately extended the implementation timeframe.”
“Our concern is that these highly skilled and experienced advisers will find it very difficult to maintain these hours when, more likely than not, they will also be required to study for a degree,” Harrison said.
“FASEA has taken 18 months to determine draft standards and yet has not commensurately extended the implementation timeframe. This is grossly unfair to both advisers and licensees,” he added.
He also said that advisers should be ethical, qualified and committed to putting the interests of their client first but “…the FASEA proposals as they currently stand will force risk advisers in particular to study for a degree that is largely irrelevant to their day-to-day operations”.
As a result of this pressure on older advisers, he predicted that around 5,000 advisers may leave the industry, which was contrary to messages from the Federal Government on people working longer so as to be less of a burden on Australia’s welfare system,
“There will of course be a flow-on effect to support staff who will also lose their jobs. The exit of so many people from the industry will not only result in unemployment, it will increase the cost of advice, potentially making it prohibitive for many people to access,” he said.