Challenge to FASEA – One Size Fits All?

Should the Government and FASEA consider developing a special classification for risk advice?

  • Yes (78%)
  • No (19%)
  • Not sure (3%)

In a rare exception, we’re extending our current poll for another week, due to the significant engagement we’ve received on this question.

That engagement has been manifested in the number of advisers who have voted on this issue and the volume of comments we’ve received.

Distilling the question to its essentials is challenging, but some of the great points raised since we last reported include (paraphrasing):

  • Defining the term ‘financial adviser’ is as meaningful (or meaningless) as defining the term ‘doctor’. There are a dozen or more of each, and each has its own qualification.
  • There are advisers specialising in various realms of financial advice, including investment advisers, share advisers (stockbrokers), aged care advisers, SMSF advisers and risk advisers. There should be a module or qualification for each.
…All the intellectual debate means nil if there is a mass exodus of experienced risk advisers

Addressing the contention held by the Government and FASEA that all those who seek to deliver personal financial advice should be required to undergo the same minimum qualification standards, one response to this principle last week was: “All the intellectual debate means nil if there is a mass exodus of experienced risk advisers.”

In other words – and repeating our point from last week – FASEA’s requirement that every financial adviser must in future hold a relevant degree qualification or its equivalent, is a blunt instrument. It’s an ideal requirement in an ideal world. But we don’t live in an ideal world.

A different perspective was also tabled last week – by a risk adviser – which argues risk advice cannot be carved-out from other advice propositions when it comes to minimum education standards:

“I just don’t see how this is workable. Risk isn’t completely stand alone. You need a good understanding of other aspects of financial planning to be able to deliver sound risk advice. It’s a discipline of, not a stand alone function to fin planning.

“It would be the equivalent of a tax lawyer only studying tax law and ignoring all other aspects of law, it wouldn’t work.”

Ultimately, does (or should) this question boil down to what the underlying minimum education standards should be for anyone who seeks to deliver personal financial advice? That is, should the minimum educational qualifying standards be made more flexible, beyond which advisers must attain additional qualifications in order to be permitted to deliver their particular advice proposition to their clients?

We welcome your considered perspectives as our poll remains open for an extra week…

  • Jeremy Wright

    This has been the problem for as long as opposing viewpoints surface, in that the real issues are continually skirted around and meaningless words are pushed forward as a legitimate argument, while the Retail Life Industry continues to decline for NIL good reason.

    It does not matter what anyone says, if the facts are staring everyone in the face, then we need someone or some representative body to clearly and simply articulate the issues to the Government, how to solve them, and then demand action.

    Thousands of the most experienced risk advisers are going to exit the advice Industry, billions of dollars, compounding every year, will be added to the Government debt and millions of Australians will no longer be able to get advice, unless there is an overhaul of the current fiasco.

    That is the only fact that matters.