2018 MDRT International Adviser Round Table – Part 2

Riskinfo joined with Zurich and the MDRT organization to conduct an International Adviser Round Table on the sidelines of the 2018 MDRT Annual Meeting in Los Angeles at the end of June.
The outcome of our discussion about minimum adviser education standards will be of particular interest to Australian advisers, who are in the midst of debate surrounding such standards, including what transition arrangements should exist for current practitioners.

Panelists (L – R)

  • Peter Sobels – Publisher, Riskinfo, RiskinfoNZ
  • Danielle Visser – Zurich Financial Services Australia Senior Exec – Sponsor/supporter
  • Michelle Hoskin – Standards International, United Kingdom
  • Brendan Walsh – US MDRT adviser member
  • Jenny Brown – Australian MDRT Chair
  • Katrina Church – NZ MDRT Chair
  • Tristan Hartey – UK MDRT adviser member
  • Panagiotis Leledakis – Greece – Founder and CEO, IFAAcademy
  • Clay Gillespie – Canada MDRT adviser member (inset)


In what may come as a surprise to many of our Australian readers, it emerged during our conversation with advisers from Australia, New Zealand, the United States, Canada, UK and Greece, which also reflected European Union policy, that your peers think Australia is the country that’s building the best framework around minimum adviser education standards – anywhere in the world – from the consumer perspective.

This consensus emerged after our panel compared notes on the minimum education requirements in their respective countries (see: 2018 MDRT Round Table Part I).

New Zealand

Katrina Church told her peers that in her world, “…the client outcomes that we see are amazing. They’re fantastic, but that isn’t the world that everyone lives in, and that’s the problem,” she said, adding that the current review of the NZ advice sector is going to have clients’ best interests embedded into the law for the first time. “I’m just staggered that we even have to embed it into the law, and I think that’s the problem. It’ll all come down to enforcement,” she said.

Responding directly, however, to the question of whether she thinks New Zealand has ‘got it right’ when it comes to minimum adviser education standards, Katrina observed (contrasting with the Australian experience) “I think New Zealand’s got it pretty easy.”

United States

Brendan Walsh: “I have to agree – I think Australia has [the best minimum adviser education standards]. Commenting on the new minimum standards to be introduced in Australia by FASEA, Brendan said “I think they’ve gone over the top, but I like the idea of it. …There’s no reason why you can’t go through a course before you can provide advice. I mean, that makes a ton of sense. So, I would say Australia.

Greece (and European Union)

Panagiotis (Panos) Leledakis also gave Australia the nod: “I must agree with all the others because it’s a more holistic system that they find. For us, this is very easy, just 600 questions – [this is] nothing. So, if we have a degree, it’s even better.”

our actual qualifications didn’t make us more respected

United Kingdom

Acknowledging this question is taken from the consumer viewpoint, UK adviser and entrepreneur, Tristan Hartey said: “It’s Australia.” He noted the UK would normally be the country he’d point to because much of the global regulatory reform of financial services sectors took a lead from UK reforms: “…we would normally be the one, I would say, because we’re the ones who are starting it. But our actual qualifications didn’t make us more respected,” added Tristan, which was an observation on the outcomes of the UK’s Retail Distribution Review, implemented from 2013.


In agreeing that Australia, at least from the consumer perspective, is implementing the best minimum adviser education standards, Clay Gillespie qualified his opinion: “I’ve heard certain people can’t get advice and there are certain things going on because of this in Australia.”

Clay said he agreed with the principle of the advice industry evolving into a profession: “…we’re trying to turn this into a profession rather than the sale of a product, so I’d say UK and Australia are ahead of most…” But then, “…I’ve heard the negative side from both the UK and Australia in regard to the smaller consumers being left behind with these regulations.” Clay was referring here to the challenges imposed on advisers by regulatory reforms that make it less financially viable for many advisers to deliver solutions to the huge ‘mums and dads’ client sector.


While Australian adviser and National MDRT Chair, Jenny Brown, thinks Australia leads the way when it comes to minimum adviser education standards (from the consumer perspective), it doesn’t mean she agrees with them.

“From an education point of view, I agree. I think Australia is the leader. But I think it’s [gone] too far… it doesn’t necessarily need to be a degree for existing advisers who already have an advanced diploma or the [equivalent] eight subjects with a designation. So, when you add a certification (eg FChFP or CFP) or something like that to an advanced diploma, that would have sufficed, along with the minimum three-subject FASEA course requirement and exam.

In summary: “I do agree [that Australia has the best minimum standards] because I do think that we need to lead on the front foot, from a consumer point of view.” But: “From a personal and adviser’s point of view, I don’t agree. I think it’s gone too far.”

There we have it. A great cross section of advisers from around the world thinks the Australian regulator is setting the high benchmark for minimum adviser education standards from the consumer perspective. While there’s consensus that Australia leads the way, there’s also general consensus that the regulator is going ‘over the top’ in its requirements – not necessarily for new entrants – but certainly for advisers already operating, many of whom have delivered outstanding, valuable and ethical advice services for a long time.

Global Adviser Standards…?

The conversation conch was handed to UK best practice consultant and regular MDRT Round Table panellist, Michelle Hoskin, whose firm is heavily involved in the development and assessment of international (ISO) quality standards for financial advisers.

Hoskin also agreed Australia was setting the ‘gold standard’ when it comes to minimum adviser education requirements, but she also offered a different perspective from which to consider minimum standards for advisers across the globe:

“I think the reason that Australia has got it right is because the world will, at some point, have those same standards,” she said, adding that the United Kingdom has already gone half-way to meeting the Australian standards, “…but they will absolutely go all the way.”

Hoskin said the UK’s Retail Distribution Review did raise minimum adviser standards, including filtering poor advisers and poor advice. She continued that when (not ‘if’) the UK raises minimum education standards to the Australian level for advisers it will filter more poor advice: “So, regardless of what academic qualifications are your benchmark, … there are still baddies.”

Michelle said the difference lies with the standards, in that the higher they are set, the less likely the baddies – those who are only product sellers trying to make money regardless of the consumer’s best interests – will be motivated to either enter or continue in the global advice profession.

every single thing that all of the countries around this table are trying to do has already been designed

Michelle’s frustration, however, relates to a missed opportunity for advice sector regulators around the world in not having given greater consideration to incorporating the existing International Organization for Standardization (ISO) standard for personal financial planning into their minimum education requirements narrative.

“What fascinates me constantly is that in 2000, ANSI (the American National Standards Institute) contacted the British Standards Institution … and said, ‘There needs to be an ISO standard for financial planning. There needs to be a global standard.’”

Michelle added that 17 countries collaborated over seven years to create this standard (Standard 22222), and that “…every single thing that all of the countries around this table are trying to do has already been designed – already there.”

Referring to a number of countries represented around the table, including Australia, Michelle lamented what she considers to be a missed opportunity: “I don’t know what on earth the world is doing because the regulators have already had the conversation and agreed it, and it’s in this document.”

Michelle’s passionate and audacious agenda is this: “I have this one-woman mission to change the world, which ultimately comes down to having all financial advisers/planners globally assessed in their own jurisdictions against that standard… They’ve already done the work. I feel like I’m just coming to the party with something that’s already been done.”

In giving context to ISO Standard 22222, Michelle told the panel it was based around the global Certified Financial Planner six stages of financial planning, but: “The uptake is miniscule. It’s tiny because nobody bloody knows it exists!”

ISO Standards for Paraplanners

Michelle turned the conversation to new international standards for paraplanners, because she predicted a future trend that would change the respective roles of adviser and paraplanner: “Imagine there’s one big ribbon around the role of a financial advisor. As these academic qualifications increase, you’ll see the role split.

You’ll see the paraplanner role get bigger and bigger. You’ll see more holistic conversations, more ‘Know your client,’ coming from the planner and the paraplanner will slide in as the other half of that whole person.

Michelle said her team sought counsel from Australia, South Africa, New Zealand, Canada and the United States: “We had to design an international paraplanner standard because when you set those two things side by side, that’s all that New Zealand needs. That’s all Australia needs. That’s all the rest of the world needs.”

If we as a global marketplace keep talking about standards and qualifications as the same thing, we’re never going to fix this

She added a great observation about comparing standards and qualifications:

“We have to stop talking about standards being qualifications and designations. They’re not. Standards are standards. Qualifications is one tick of that list of standards that an adviser should adopt.”

She continued, “If we as a global marketplace keep talking about standards and qualifications as the same thing, we’re never going to fix this. It will never ever work because they’re not the same.”

The other life insurance-focussed point made by Michelle was that the United Kingdom currently applies different qualifying standards for the breadth of advice services being provided, noting lower standards apply for advisers only advising on life insurance solutions. Asked whether there should be different minimum education standards depending on product specialisation, Michelle’s concise response was:

“No way. 100%.”

Life Company Perspective

Zurich’s voice at the table was Danielle Visser, who has worked with many advisers in Australia, helping to add value to their businesses.

Danni took a different approach to the view expressed by Michelle in her last comment, suggesting instead that there’s an argument that would support different minimum education requirements for different advice specialities, particularly as it relates to risk-focussed advice solutions.

While agreeing that minimum education standards for advisers should be increased, Danni had some reservations about the requirements that are set to be applied in Australia to the increased adviser education standards:

“We feel as though the Australian market is a comparable financial services market to others around the world, such as the UK, which [as pointed out by Michelle] has taken the approach of applying different qualification requirements for protection/risk- only advisers relative to full financial planners.”

The principle underlying Danni’s position relates to addressing Australia’s underinsurance dilemma: “Ensuring that Australians are able to get affordable protection from an adviser is crucial in an under insured market such as Australia and the UK,” she said.

So, while Danni reiterated her and Zurich’s support for the proposed education requirements for new advisers, including an exam that will represent a common benchmark across the industry, she stressed that the new standards should form part of a larger transformation that takes an industry (currently riddled with scandal in Australia) to an educated, trusted profession. “This will be a strong step in the right direction in regaining the trust of everyday Australians,” she said.

Danni also addressed another of Michelle’s points about ‘the baddies’ who still operate in the advice sector. In a call to all industry stakeholders (not just advisers), Danni  told her peers that ignoring poor advice behaviours is almost the same as endorsing or legitimising that behaviour by not ‘calling it out’ when those instances emerge.

She told the panel she thinks the reason Australia’s financial services sector has experienced twelve separate inquiries over the last ten years is because “…we’ve been too polite with one another,” which is code for the fact that the industry as a collective hasn’t addressed bad behaviour when it has arisen, whether that bad behaviour has been enacted by institutions, dealer groups or advisers:

“So, I do think [minimum adviser] education needs to be increased,” said Danni, “…but I think that the way that we’re actually doing it in Australia could be improved when you look at the full spectrum of what it takes to become an elite level financial adviser.” She said great advice doesn’t necessarily result from sitting through years of cemented learning: “There’s an entire relationship and rapport-building aspect to great advice that can’t be overlooked.”

Danni also offered the observation that higher minimum adviser education standards may lead to increases in the cost of advice for consumers, prompting her to add: “My concern is the consumer will actually be worse off from a cost perspective, when you consider the proposed qualifications required to simply give basic risk advice.” She added, “Zurich and the industry are focused on improving an adviser’s efficiencies and reducing costs for the end client, but with the regulation currently in place, even basic advice is a very time consuming, admin-heavy process, that ultimately drives up the costs for all stakeholders.”

Compounding this, according to Danni, is “…the high likelihood of [adviser] attrition from the education process and the way we’re trying to improve education, which will reduce the supply of advice. I think the thought is great, but the process is very poor.”

Final Words

In closing comments, some of our panel covered some new territory, while others re-emphasised points made earlier:

Clay Gillespie – Canada

Clay’s final thoughts focused on the emergence of robo-advice in Canada, where he told the panel he sees a dichotomy emerging. He said some consumers are looking to ‘go direct’ with robo-advice as a solution to their wealth management and/or wealth protection needs, but that in doing so, remain ill-educated or ill-informed about what their true needs may be or about what other solutions may exist.

He suggested that, at least in Canada and a possibly a few other countries, the product suppliers may often prefer to support involvement in delivering robo-advice solutions, and that these providers “… are the ones that seem to have the push in certain areas to make things happen.”

Brendan Walsh – United States

Brendan summarised the conversation as fascinating, in the sense of developing a perspective on the different treatment of minimum education standards required of advisers around the world.

He told his peers he liked the idea of a global ISO standard in relation to adviser education benchmarks: “…it makes perfect sense,” he said, but cautioned that “…when we talk to our government, we’re talking about logic with an illogical body and so, you could …say, ‘This is it. It’s been done. Vote on this. Let’s go. Just move forward.’”

Brendan said the adoption of ISO standards was not likely to happen in the US due to individual US states or other constituencies which had their own special interests and agendas they would be seeking to advance. He said this was “…somewhat dis-heartening” and that, as an industry “…we can do better.”

Katrina Church – New Zealand

Katrina committed to advance the ISO 22222 standard to New Zealand regulators, who are currently considering future minimum education standards for advisers.

Speaking from the perspective that she believes New Zealand already has good standards for advisers, Katrina’s concluding remarks included: “I love this [referring to ISO Standard 22222]… I would like to have a business that’s set on this [standard] because it allows me to manage that practice a lot easier and set a higher standard, which is what we really aspire to be.”

Katrina was also equally concerned with transition arrangements for existing advisers in New Zealand as she was about what the new minimum educations should be: “…whatever our regulator does decide, I have to have faith that they’re going to watch Australia and take on board what’s happened in Australia and make it easier [for existing advisers] to transition. I have to have faith.”

Jenny Brown – Australia

Jenny echoed Katrina’s comments about transition arrangements for existing advisers when it comes to minimum education standards and she also voiced concerns around the sustainability impact these education reforms in Australia may have:

“I find it fascinating that, as per normal, Australian advisers seem to be the ones that have got the toughest rules – and it doesn’t matter whether it’s compliance and 100-page statements of advice, financial plans or whether it’s education. My biggest concern is the transition for existing advisers,” she said, continuing, “I know I can go back to school. But I worry about a lot of my peers who are in that 50-plus age range, as well as some younger advisers, who might say ‘This is all too hard,’ and exit and sell their businesses.”

Jenny also raised the quite serious possibility of advisers also being exposed to mental health issues stemming from the pressures associated with the spate of regulatory change in the Australian market, and the extent to which this was having a psychological as well as material impact on some Australian advisers. She said there was a lot of work that was needed to be done to assist advisers during this transition period.

Australian advisers seem to be the ones that have got the toughest rules

Tristan Hartey – United Kingdom

Tristan reiterated his view about minimum adviser education standards from the consumer perspective:

“I think from the consumer’s point of view, it’s really interesting to see that if I was someone looking for financial advice, I would want to go to someone in Australia because it looks like, from an outside point of view, you’re the most qualified people.”

Tristan added, however, that current UK rules, which are less arduous than the proposed Australian rules nonetheless act as an impediment to business:

“Turning it around [from the adviser perspective] … in the UK we have too much regulation that from a business point of view, becomes business prevention.”

He continued, “We’re constantly having to tick boxes and every year I swear there’s an additional form with another signature that needs to be signed. Clients sit there and ask, ‘Why do I have to sign this? Why every year do I have to give you my ID? You know who I am,’ and I think there are two sides to it. It’s how does the consumer see it and ultimately, consumer confidence is one of the most important things that we, as advisers, need.”

In a disappointing assessment, Tristan added that, following the RDR reforms in the UK since 2013, the financial advice sector remained an industry that was not trusted by the public.

Michelle Hoskin – United Kingdom

Michelle’s parting narrative predicted a fundamental change in the nature and mechanics of how personal financial advice may be delivered in future, based around what she sees as the future structure of advice businesses (and advice processes) being split into three components:

“When the ISO was initially designed, the UK did some research and they found that 75% of consumers had more trust and confidence in their financial advisor if they had a kitemark, and a kitemark is the ISO standard …and that was why the UK got behind the [IOS 22222] initiative in the first place.

“Whatever happens with this ISO standard, whatever you go back to your own countries with, just bear in mind that whatever the standards are, particularly in Australia and New Zealand, and as they rise in Greece, that role that exists today as a financial adviser will have to be broken down into component parts.

“For example, those advisers that you are talking about – if they’re going to be challenged by business or mental health issues, there is actually a role for them in the market to be an ambassador of your firm. They don’t have to give advice. They can simply focus on sales. They have to go and network and be the rainmakers for your business.”

Moving to component number two, Michelle continued, “The prospect then drops into the hopper and sits with a financial planner. That financial planner will talk to them about their life in the next 25 years – the holistic side of that person.”

Stage or component three: “Then that client then drops into a technical specialist who has done the exams and has the qualifications.” Here, Michelle is referring in particular to the growing role that she sees will be played by paraplanners in future advice business processes – the technical expert who supports and works with the financial planner who delivers the personal and holistic component of advice process.

Michelle’s argument supports the notion of advisers working to achieve standards, as set out in global ISO Standard 22222, rather than in attaining specific qualifications. Within this context, Michelle’s final words were: “Qualifications are irrelevant.”

Panagiotis Leledakis – Greece and European Union

Panos believes disruption is a good thing for the financial services sector, including its application to minimum adviser education standards.

He advocated for industry self-regulation and supported the idea of a global ISO Standard for financial advice. He added that he doesn’t believe so much in regulatory changes: “I believe in private initiatives and because I’ve never seen regulations that were implemented the way that they should be.”

From a disruption perspective, Panos continued, “We need …to re-engineer, remodel and rebrand the profession in order to attract talented young people to do things right from the start.

I’ve never seen regulations that were implemented the way that they should be

“I believe in everything. I believe in standards. I believe in modelling. I believe in the disruption of our industry. That’s what I do… and we need private initiatives to educate and attract new, talented people – and if you educate them across the same standards, you can better control what they do and in the right way.”

Danielle Visser – Australia

The final word in our 2018 MDRT International Adviser Round Table went to Zurich Australia’s Danni Visser:

“If there’s one thing that I’d like to see, it’s that there’s a guiding beacon of light accompanying any changes to adviser education or improvements or standards that will actually make it easier for the customer to get advice.”

Referring to the 80 percent of Australians who don’t receive personal financial advice, she said that anyone is better off having an insurance policy – even if it’s not the best “…because when you see a claim being paid, that person is far better off.”

Danni agreed changes to minimum adviser education standards are needed, “… because there have obviously been some issues – otherwise we wouldn’t be having the discussion. But the beacon guiding any changes should be: ‘Does it make it easier for that 80 percent to get affordable, quality advice?’”

Responding to other points made during the discussion about increasing minimum adviser standards, Danni concluded with “…increasing the cost [of advice] and eliminating half the advice network certainly doesn’t make it easier for the consumer.”

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