Do you believe that educational qualifying standards should be raised for those wishing to provide personal financial advice?
- Yes - by self regulation (50%)
- Yes - by government regulation (33%)
- No (14%)
- Not sure (3%)
The collapse of Storm Financial and other financial advisory firms has raised the level of public debate about the quality of personal financial advice in Australia, and what consumers should expect from those who call themselves ’financial advisers’.
This debate relates to:
- Educational qualifying standards for those aspiring to provide personal financial advice
- Monitoring of the quality of advice being provided to consumers by those already qualified
The focus for our latest riskinfo poll is on point 1 above (we will come back to point 2 in future polls).
Our question is:
Do you believe that educational qualifying standards should be raised for those wishing to provide personal financial advice?
Some advisers may consider that education standards are sufficiently high at present and that the issues lie more with the monitoring of subsequent adviser behaviour, while other advisers may have a view that entry standards should be raised.
For those advisers who believe that higher qualifying standards should apply, how should that be achieved?
- Should there be an industry-wide ‘minimum hours’ requirement for course work prior to undertaking examinations?
- Should the ‘pass’ mark for the examinations be set at higher levels?
- Should a single examination set be developed by regulators?
- Should training companies such as RG146 Training Australia, Kaplan and Pinnacle join forces to implement an industry self-regulated code of practice?
…there will be a proportion of new entrants into the financial services sector who may choose the ‘path of least resistance’
There are a growing number of training providers emerging in the financial services sector who offer a spectrum of courses and qualifications, whose differing fee levels may reflect the quality of their output. With human nature being what it is, especially in the present economic climate, there will be a proportion of new entrants into the financial services sector who may choose the ‘path of least resistance’, which may or may not be beneficial to the industry over the longer term.
RG146 Training Australia MD, Dr Mark Sinclair, holds a view that the key driver for graduates providing sound advice is the quality and integrity of the assessment methodology itself.
According to Dr Sinclair, the minimum assessment standards that should apply across the industry include:
- Strict examination conditions (no discussion/collusion)
- ‘Closed book’ examinations (current standard across the industry is ‘open book’)
- Independence of the examiner (eg not a related party such as a supervisor or lecturer)
- Quality of the ‘knowledge bank’ of multiple choice and short answer questions
But who should determine these and other standards? The providers themselves, or the regulators?
Take a minute to place your vote and have your say…
Add your comment now
3 Comments
Iam not sure that raising the educational standards will make that much of a difference just now. I know of many chartered accounts recently who gave lousy advice resulting in their clients losing loads of money.
We need to think of training and monitoring advisers on why they give/gave particular advice, not confounded box ticking.Ie,Was it really in the client’s interest, was it that the adviser had pressure to put it in the Dealership’s preferred fund, did it pay more commission, what REAL reserch was carried out, etc. ?
I frankly believe that most current advice structures are fundamentaly corrupt. We must get away from volumne and conflicts of interest and these questions should be asked in compliance audits and on going compliance…Can you see this happening in the current client advice structures ?
Yes, higher entry standards actually do help, but we have to break up the current advisory structures and revise completely the quality of the advice process.
Our business is in a complete blody mess,in regards to the public perception and every confounded professional edition, be it Asset, Money Management, Business News, IFA, Financial Review, etc harps on that we are not accepted as professionals.
The truth is many of us do a very good job and keep clients for many decades who also refer their friends to us. In the general public’s perception, our standing will be enhanced when the public sees us of particular value across the board and that we are recognised that we are are genuinely unbiased and not ‘ sales ‘ representatives of a Dealer or anybody/ institution and actually are a BENEFIT to people seeking financial advice.
It would also help if all in this business actually did meaningful annual reviews, year in and year out.
regards.
Regardless of educational qualifications, it is the appropriateness of the advice that is most important given all the clients circumstances. The Storm debacle has graphically illustrated that. I have double Economics and Arts degrees and worked as an Economist in another life but I still need to do ongoing reading and education to keep up with changes in the industry and general knowledge. I mainly write risk business now to try and keep things as uncomplicated as possible and I don’t think you need a degree qualification for that. However I believe at least a diploma level course should still be a requirement together with ongoing training and professional development.
The industry has always been a “reference” industry. This is why there are multiple technical departments to which advisers can refer.This sort of thing is a typical “knee jerk” reaction that we have seen previously.It would be more relevant for advisers not to have to take “the party line” when it comes to doing what the Dealer Group says.The correct information to the client for his circumstances is most important.The industry is highly regulated as it is, it doesn’t need more academic input, in my opinion.How many acedemics have been an adviser for any length of time, and understand the industry form the inside?There will always be, inevery industry, those who give the industry and the rest a bad name.We need people who are client oriented, not self orientated.