Advisers Disagree on Higher Education Standards

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Will you be prepared to undertake further studies to meet new minimum education standards being mandated for authorised representatives?
  • Yes (47%)
  • No (34%)
  • Not sure (20%)

Advisers are split on the question of whether they will be prepared to meet higher minimum industry education standards.

As we go to print, our latest poll results reveal only 48% of advisers have said they will undertake further studies to meet the new minimum education requirements that are to be implemented across much of the advice sector. One third of poll respondents have said they will not be prepared to do more studies, while a reasonably high 19% have yet to make up their mind (see: Large Institutions Move on Advice Education Standards).

A number of advisers have expressed reservations about establishing a link between higher minimum education standards and an increase in the quality of financial advice:

Does Higher Education ensure competency and honesty… I think not

And this:

… attaining higher qualifications will not necessarily improve the resulting service… unless the processes that sit behind the advisers are sufficient to check that the advice and service is up to a certain standard.

Another adviser also stressed the importance of the processes that support the delivery of advice, irrespective of whether the adviser operates under higher minimum education standards:

… proper application, and not more “education”, is the key

No amount of education is of any… good at all if the education the adviser already has is not being properly applied. Therefore proper application, and not more “education”, is the key.

The debate about whether higher education requirements for advisers will lead to higher quality advice will continue. But in terms of how the financial advice sector is perceived by the consumer, this act of industry self-regulation will be seen as a positive.

Given the results of our poll so far, however, it appears that at least a proportion of the current financial adviser community will be seriously considering their future in the industry if they are required to meet higher minimum educational and certification standards than they currently possess. If this is the case, is it possible we will witness a mass exodus of established advisers from the industry in the next five years in the lead-up to cut-off dates that are being set for the new minimum education/certification levels? And what impact might this have on the industry – positive and negative?

There are multiple issues that stem from this wave of recent announcements about setting higher education standards for advisers. We will monitor and report on these issues and offer you the opportunity to have your say in future polls. In the meantime, tell us what you think about this current question, as our poll remains open for another week…



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7 COMMENTS

  2. It’s vital that advisers no matter what age or stage of their career they are at need to not only be adequately trained but continue to be upskilled. How can a 30 year old adviser with minimal training and experience look a 60 year old in the eye and say “I understand your situation” when they are not in that situation themselves and their only reliance is what they’ve learnt in studies. No amount of education can prepare them but will go a long way. Combining this with mentoring programs may be a way of working towards cultural solutions.
    As a well educated veteran adviser I have walked the walk. It’s a difficult call for someone to have empathy when they have not had the real life experience. The higher the entrance level the better and should not stop at the entrance. The same applies when advising younger clients who are starting out and need to understand what’s important to each and every person no matter what stage of life they are at. Education is very important

  3. All things being equal, higher education is a good thing. At wost it gives the public a perception of additional competence. However proper application of skills is what’s more important. To be a professional adviser is to accept that the buck stops with you. It’s after all the adviser that would get the please explain contact from ASIC.
    One major problem in the industry is that the agenda of management is often not consistent with the best interest of the client. Off course when your business gets caught out doing the wrong thing, it’s a good management tactic to announce to the world that we will get those advisers to do better by insisting on higher education levels. I’m for higher education but right at the moment it’s beeing promoted by some to distract from the real causes of bad advice.

  4. “What impact might this have on the industry?” the story above asks….

    How about an exodus of learned, compliant, morally upstanding planners will leave the industry and they will be replaced by highly educated, young advisers with no idea about what being a planner is really about.

    90% of this job is soft skills. The 10% mathematical part can be done by almost anyone.

    The better the conversation with a client, the better the plan, the better the outcome. You can’t teach a student how to engage a client – it takes years and if most of the mentors leave……then I look forward to a few more years of ugly stories in the media through poor advice.

    Probably not what the “profession” was expecting.

  5. The pursuit of “higher” education for advisers was always, and remains, just a marketing ploy. Back in 1990s a number of well known tied agency companies used “education ” to market to the public that their agents were better than the normal agents because of their higher “standards”, and could not possibly be the same fellows who were directed by their masters to sell the dreaded “child endowment ” policies. Same ethos, different paint job

    The education shibboleth has been spiralling up on a frolic ever since, with snouts in the trough everywhere flogging “training ” . Those same life companies, most now run by banks, are still resorting to the oldest smoke screen in the advice business – “our advisers are better “educated” than yours””

    Degrees or their equivalents are not the answers, particularly if the education “provider ” is somehow connected in any way with a product manufacturer or a registered training organization. A degree merely tells us that the graduate is capable of learning and has acquired a mandated level of knowledge on a limited subject at a particular time. A degree is the start of a learning experience which can only be obtained with practice. And like all of life, mistakes will be made

    Just as a graduate with a medical degree is not let loose on patients un-supervised for many years, Degrees for advisers will fix nothing

    Degrees and diplomas don’t come with an Ethics major. If they did no lawyers would ever go to jail. No doctors would be punished for having sex with a patient. And Degrees don’t teach advisers how to resist pressure to make targets in a vertically integrated industry.

    Politicians find the mantra attractive. Its an easy fix, move on, nothing to see here.

    So what is the answer. Better still what exactly is the problem that having Degrees/Diplomas are supposed to fix. As Geoff Morris said of CBA, the well known miscreant advisers were not necessarily dud advisers, but in truth were unwitting victims of the CBA system, a system that rewarded sale of products, and did not reward those, nor their up-line gouging management
    who clipped the advisers remuneration, when ADVICE was provided without a PRODUCT SALE

    For those who do not accept vertical integration and product sales at all costs in a bank are a PROBLEM, look at the feverish submissions in recent days to the FSI defending the system.

    Methinks they do protest too much.

  6. My first occupation was Teaching. I graduated in the middle of the intake with a “C” as I was not academically any good. 10% of the Graduates were given the classificatio of “Distinction”. These people had achieved average pass marks of over 90%. All of them without exception had resigned either during or immediately i[on the completion their first year teaching in the classroom. Why? They couldn’t do it. They had all the book answers but could not translate and innovate the theory into practice. This is a common issue in many fields of endeavour.
    In Financial Planning, life experience and comunication skills are almost as important as product and strategy knowledge. Higher education standards in the form of degrees gives one technical knowledge often including items which the Planner may never use in his life (eg since I left school know one has ever asked anything about Trigonometry and I have never had to use it, and in my final CFP exam, I had ot answer 8 questions about Bond yields and do various calculations etc and never used that in 15 yrs of financial planning).
    Lastly, trust is built around interaction between people. It is not built because I happen to have a Degree. IN fact, not one of my clients has ever asked what my qualifications are in 15 yrs. Having letters after my name is meaningless to people and it certainly does nto stop someone with ill intent or a criminal tendency from becoming a crook.
    So, what is the reason again for insisting on this? Respect? Maybe – but from whom? Being seen as a Professional? Maybe – but that implies my existing clients do not see me as one now and that is just so much rubbish!

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