The FPA has reiterated its view that the competence obtained through experience should be better recognised in the financial adviser education standards and has recommended that the Government should not implement an experience exemption to the education framework.
In its submission to Treasury on the proposal paper in relation to adviser education standards, the association says that while it shares the Government’s goal of making financial advice more affordable and accessible to Australian consumers, it believes that “…simply providing an experience pathway alone is not going to achieve a reduction in the cost to produce advice.”
However, it says in a statement, that if the Government does proceed with an experience pathway as proposed, the FPA recommends the following requirements be met:
- 10 years of relevant licensed experience between 1 January 2004 and 1 January 2019
- A clean record
- A statutory declaration
- Either membership of a professional association or the completion of an approved ethics course
- A 10 year sunset period
The FPA believes “…unassessed experience alone is an insufficient foundation to meet the objectives of raising the minimum education requirements for professional financial advice providers and continuing to build consumer confidence in the profession.”
…55% of FPA members have already completed their required education and 35% are on track to meet the existing education standards…
It surveyed its members to understand their views on the proposed modifications and 55% of FPA members have already completed their required education and 35% are on track to meet the existing education standards.
It says of those surveyed:
- 71% of members meet the proposed experience pathway
- 55% oppose the introduction of the proposed experience pathway
- 73% would only support an experience pathway if there was a sunset introduced
Click here for more details on the submission.
Welcoming QoA Review’s Principles-based Approach
Meanwhile, the FPA says the Quality of Advice Review’s proposals, to move to a more principles-based approach to regulating the provision of financial advice, is a welcome shift.
In its submission to Treasury the association says however that the definition of ‘personal financial advice’ “…must have the provision of financial advice at its core and not be based around financial product(s) or the class of product.”
In a statement the FPA says it believes the regulatory costs of providing personal advice “…must help improve the affordability of advice for consumers by ensuring there is a level playing field for the regulatory requirements and standards imposed on advice providers.”
…the regulatory environment should facilitate the provisions of simple personal financial advice to clients…
It adds that the regulatory environment should facilitate the provisions of simple personal financial advice to clients “…in an affordable manner by financial planners and financial planning practices, as well as non-relevant providers, to meet consumer demand.”
The FPA says regulatory requirements must:
- Build consumer trust in the different types of advice services and benefits through high standards, appropriate education and training, effective requirements and accountability, and transparent regulation of the provider, applied consistently across the financial services sector
- Reduce input costs into the provision of financial advice
- Facilitate an increase in financial advice providers (through career pathways/education/professional year/retention/etc.)
- Ensure active accountability for all financial advice providers
- Maintain consistent consumer protections across the industry
- Unify the industry
- Be fair and equitable
The association believes the impact on competition in the financial advice market must be a key consideration when examining the current legal obligations and making recommendations for regulatory change “…and must not provide a structural competitive advantage to one type of provider over another.”
It adds that only ‘relevant providers’ who meet the professional standards “…should be legally permitted to use the terms financial planner and financial adviser and like terms.”
Click here for more details on this submission.
FPA stop pretending you work for advisers. Just as bad as AFA no wonder you are merging!
Many great thoughts and ideals need to take into account commercial reality, effective ability for practitioners to be able to actually work in that environment and a pathway that encourages and excites new people to join.
Now, let us look at what has occurred.
Twelve thousand Advisers have been forced out of the Industry.
Life and disability premiums have skyrocketed due to a massive decline in risk Advisers and holistic Financial Planners cutting back on risk advice due to the cost and regulatory maze, with insufficient revenue to cover costs and the risks.
The FPA not recognizing that the only way forward is to make risk advice a separate Business model that ENCOURAGES existing Advisers to stay and write New Business AND for new people to want to join because of the opportunity to start their career in risk Advice, earn a good income for themselves and their Employer and have a PATHWAY to further their career into full Financial Planning while they earn.
From what I have seen, there has been little done to go down this obvious path, which, as seen over the last couple of years, has led and will continue to lead to more Advisers exiting and insufficient Advisers joining, with the Life Insurance sector suffering more pain, which will impact all Australians with higher premiums, inferior services and product offerings.
The purpose of an Association is to make their members lives more manageable and be given breathing space to make a living, while encouraging best practice so clients get a professional service and product to suit their circumstances.
This means the Association needs to educate Politicians and Regulators as to how the REAL world works and to make sure if a Government is heading down the WRONG PATH, then they redirect them.
All we have seen in the past, is polite conversations in countless meetings and a end result of total chaos and economic pain for all Australia, with misguided policy and economic ruin for so many Advisers, Advice practices, their families and Australians who could no longer attain Advice and are now in big trouble.
Good policy creates growth and opportunity.
Bad policy creates “supposed” short term gain and always, long term pain.
A true Association stands up for good policy and does not take a backward step on bad policy.
The first step is for Association directors and lobbyists to recognise which is which.
Comments are closed.