Banks, financial institutions and industry funds have had too much input into the shape of financial advice education and other voices need to be heard via an industry inquiry according to the head of a financial planning broking business.
Connect Financial Service Brokers, Chief Executive, Paul Tynan stated that while the debate around advice standards has been coming for a number of years, too many groups are involved with the debate and “that the four major banks together with AMP, IOOF and the industry funds have not been good for the financial service industry”.
“The majority of industry input and government board positions come from large institutions and industry associations and their personal interests are all over their recommendations,” Tynan said, criticising senior industry executives for ‘discovering’ vertical integration, and product pushing was not in the best interests of clients only after leaving the sector.
He also stated that while the advice sector needs a base level of transparent education standards to be put in place, the Federal Government and regulators should accept “there is little likelihood that mature age advisers are going to go back to school to complete higher education / degree qualifications”.
He also called for a new licencing regime under which older advisers would take on a relationship adviser role and still receive brokage from their client register as they transition into retirement, while avoiding the loss of industry knowledge and experience.
Tynan stated that in past advice failures education standards had little or nothing to do with the failures, and advisers needed to be taught interpersonal engagement skills and how these align with the technical skills required under proposed regulations.
“Modern education does not teach the interpersonal engagement skills that the more experienced advisers have in abundance. The provision of quality advice will continue to be a P2P business and the ‘soft skills’ essential for long term business / practice success,” Tynan said.
“Even though I accept the need for a base education level and although an adviser may have attained a CFP qualification this does not mean that they have the capacity to give advice or able to manage a financial planning SME business.”
