Majority of advisers support recognition of experience

While a final version of the new education standards is still being debated, a majority of advisers have voiced support for having experience considered in the transition pathway.

According to an ifa straw poll, more than 80 per cent of respondents agreed that years of experience should count for existing advisers transitioning to the new standards. Out of 328 votes, only 20 per cent believed experience should not count.

This debate first sparked in December 2015 when the government released draft legislation that stated prior learning for existing advisers will be measured by the types of courses advisers have completed.

Industry associations have since responded to the draft, calling for amendments so that it also recognises advisers' experience and competence, and not just their academic achievements.

Speaking to ifa, JBS Financial Strategists' chief executive and founder, Jenny Brown, said she believes advisers' experience should be considered, but only as long as it is paired with other accomplishments.

"There needs to be a combination of education levels, professional designations and relevant experience," she said.

"For an experienced adviser with, say, 15-plus years, who holds an advanced diploma and specialist skills in areas that they practice in such as risk, SMSF or retirement planning, together with professional designations such as FChFP SSA, or CFP, then, yes, it should count.

"To be expected to complete a degree within a two-year time frame while working full-time is quite unreasonable. However, for those with only a RG146 minimum qualification, then they need to recognise that if we are to be called a profession, we need to raise this to a higher level."

Dianne Charman, managing director of Jade Financial Group, would agree, adding that since experience is "highly valued" by clients, it should also be valued in the legislation.

"Experience is a skill that only comes with applying for your knowledge. The advisers who have consistently improved their knowledge over the years and have demonstrated competency in providing financial advice should have recognition of this," she told ifa.

On the other hand, Stephan Strategic director James Stephan said to label an adviser as experienced based on their years of service is "naive". He recommends the government should implement a "bridging assessment".

"I believe some 'experienced' advisers are really only 'mature' advisers who might simply stood the test of time. The quality of their experience should be assessed, including the number of client-facing house and their technical competence," he said.

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+1 #18 Angelique McInnes 2016-04-04 18:52
Something to consider. There are advisers who have only the quality of two years worth of experience that they gained over for example 5, 10,or 20 plus years working. There are advisers who have the quality of 5, 10, or 20 plus years of experience covering for arguments sake, 5, 10,or 20 plus years working. To put it simply, its the quality of the experience over the number of years, rather than the quantit y of years of experience that is critical to the arguments. How this is measured is important too.
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+2 #17 Lindsay Binning 2016-04-02 13:21
I don't
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+1 #16 Reality 2016-04-01 11:08
Graham, whilst I understand where you are coming from every other profession requires someone to complete far higher level of education before specialising.

Furthermore our industry is a little different in the respect that advice in one 'specialist' area can (and generally does) have an impact on the rest of a client's situation. For instance when making risk only recommendations to a client it will have an impact on their personal cashflow (reducing investable surplus), superannuation balance or both.
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0 #15 Graham H 2016-03-30 11:15
[quote name="Peter S"]Is there such a thing as only "working in Risk and basic superannuation" ?

Yes there is, BUT not necessarily in a sole practitioner business, most (if not all ) professions, have areas of specialization. why not the financial planning industry?
My Practice has has me (ageing and nearing retirement) and much younger more highly qualified Planner, specializing in Financial planning (TTR, SMSF, Retirement income, Risk, Superannuation etc)
I am also a partner in a specialist Retirement income practice with a very highly qualified planner as the lead adviser, my role is to provide "Risk" advice support, an area where (in spite of qualifications) I am more experienced and knowledgeable..
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+1 #14 Reality 2016-03-29 15:58
@ Billy & Experienced Adviser

Exactly.

If experience was the be all and end all to giving quality advice the industry wouldn't have the reputation it does at the moment.

Unfortunately, the industry was a joke for many years and now here comes the line in the sand. We preach about insurance to clients but many advisers didn't 'insure' themselves by increasing their own education to safeguard against legislative change (that was clearly coming).

I just wish I started my degree sooner when there was originally talk of increasing standards.
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+3 #13 Billy 2016-03-29 15:26
Quoting Paul Meleng:
Experience in Financial Advising is not just warming a chair, What sort of "in case you need it" education could match years of monthly PD focusing on real relevant issues at the time and being tested on same, attendance at high quality industry presentations and years of hearing the spin but seeing the reality, sweating with clients through market downturns, reading vast volumes of economic works to improve understanding of market forces because you really want to know ( not just to pass an exam). Add the actual existence of a large number of long time intelligent clients who highly value the real results. Baah Humbug , the sheer arrogance. Also, many "old" advisers have come into advice in the second half of life and may have a degree or equivalent but not in finance or commerce. Real industry experience, property development or valuation, engineering etc and the professional practice discipline that is strong in those real professions, I suggest that with a Dip FP and years of experience those are more useful sources of knowledge than padding out a "degree" in Financial Planning with a swathe of theory prior to practice. If that is all you do then all you "know" is what you have read. Blind leading the blind.


Since 2009 it has been obvious that education standards would be lifted at some stage....that's 7 years we've had to prepare for this, and any changes that come in will likely involve another 4 or 5 years of transition.
Other professionals are subject to minimum standards, so why not FPs? Given how many bad eggs are in the industry (many of whom do in fact, have many years of 'experience', experience in giving substandard advice), it should be obvious to all that this is the way forward.
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+9 #12 Experienced Adviser 2016-03-29 14:10
The problem with recognising 'experience' is where one draws the line in the sand. Is it 10 years? 15? 20? 30?

And how do we know that those years of experience actually mean an adviser knows what they're doing? Wondering is correct in saying is it 15 years of experience, or one year's experience fifteen times over.

Perhaps a case by case review is the only fair and equitable way to do this. But who will be responsible and at what expense?

I think this is why the introduction of higher education standards has to happen. While I don't agree with the timeframe (which is far from realistic), I certainly agree with the premise.
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+3 #11 wondering 2016-03-29 13:35
Quoting Paul Meleng:
Experience in Financial Advising is not just warming a chair, What sort of "in case you need it" education could match years of monthly PD focusing on real relevant issues at the time and being tested on same, attendance at high quality industry presentations and years of hearing the spin but seeing the reality, sweating with clients through market downturns, reading vast volumes of economic works to improve understanding of market forces because you really want to know ( not just to pass an exam). Add the actual existence of a large number of long time intelligent clients who highly value the real results. Baah Humbug , the sheer arrogance. Also, many "old" advisers have come into advice in the second half of life and may have a degree or equivalent but not in finance or commerce. Real industry experience, property development or valuation, engineering etc and the professional practice discipline that is strong in those real professions, I suggest that with a Dip FP and years of experience those are more useful sources of knowledge than padding out a "degree" in Financial Planning with a swathe of theory prior to practice. If that is all you do then all you "know" is what you have read. Blind leading the blind.


If this is all that is required then why did we demand that accountants need to go through all these requirements to get registered and trained and qualifications to give advice. Most if not all of them already have degrees and have gone through further post graduate education and training to become professionally accepted into their associations. So we should have just let all of them in. How are they different from what you are arguing now. Discuss?
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+2 #10 wondering 2016-03-29 13:27
Quoting marksman:
It took a few years after leaving university for me to realise the true value of my degree, namely: it taught me how to think, not what to think. Formal education is useful as it provides structure while experience provides the meat within that structure. I would rather employ a person with several years experience in the industry, and little formal education, than a newbie with more degrees than a thermometer. Why? The newbie has yet to gain his street creds, e.g., advising and handling clients during the depths of the 2007/2009 market decline. Live through that decline and its 9-year aftermath and you will see why truly experienced advisers are worth their weight in gold. Furthermore, the client is invariably paying for the mistakes that occur while the newbie is getting this practical experience. And how do I know this? It's based on 36 years of observation and practical experience......but what would I know.


May I ask if that is how you employ planners now how did you get your start without a degree or any experience?

If you give some of these degree qualified people a start you might just be surprised at their ability. After all we all have to start somewhere and they shouldn't be let loose without adequate supervision and training anyway. Just as you no doubt were when you first started. Regardless on the experience or degree qualification all new employees need some initial training and guidance to get 'how it is done here' so that you can get the most out of them in the quickest time frame.
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+3 #9 Paul Meleng 2016-03-29 13:02
Experience in Financial Advising is not just warming a chair, What sort of "in case you need it" education could match years of monthly PD focusing on real relevant issues at the time and being tested on same, attendance at high quality industry presentations and years of hearing the spin but seeing the reality, sweating with clients through market downturns, reading vast volumes of economic works to improve understanding of market forces because you really want to know ( not just to pass an exam). Add the actual existence of a large number of long time intelligent clients who highly value the real results. Baah Humbug , the sheer arrogance. Also, many "old" advisers have come into advice in the second half of life and may have a degree or equivalent but not in finance or commerce. Real industry experience, property development or valuation, engineering etc and the professional practice discipline that is strong in those real professions, I suggest that with a Dip FP and years of experience those are more useful sources of knowledge than padding out a "degree" in Financial Planning with a swathe of theory prior to practice. If that is all you do then all you "know" is what you have read. Blind leading the blind.
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+7 #8 marksman 2016-03-29 12:43
It took a few years after leaving university for me to realise the true value of my degree, namely: it taught me how to think, not what to think. Formal education is useful as it provides structure while experience provides the meat within that structure. I would rather employ a person with several years experience in the industry, and little formal education, than a newbie with more degrees than a thermometer. Why? The newbie has yet to gain his street creds, e.g., advising and handling clients during the depths of the 2007/2009 market decline. Live through that decline and its 9-year aftermath and you will see why truly experienced advisers are worth their weight in gold. Furthermore, the client is invariably paying for the mistakes that occur while the newbie is getting this practical experience. And how do I know this? It's based on 36 years of observation and practical experience..... .but what would I know.
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-4 #7 Steve 2016-03-29 12:12
If only there was some sort of body that sold courses and memberships that could fix this dilema.
If it could just take our money and really charge us exorbitantly that could do wonders.
Thousands and thousands of dollars repeatedly for nothing more than online courses. That will fix things.
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0 #6 wondering 2016-03-29 11:54
This debate is painful and naive.
As planners we have just received a tremendous leg up with becoming 'tax advisers' without any justification, testing, education requirements or anything. We demanded & achieved that all accountants go through a significant education and registration process.
It is incumbent on all of us to lift our education standards and to argue that experience is sufficient, defeats the purpose.
The old saying of does he have 15 years experience or one years experience 15 times rings true. There will always be exceptions to all rules, but we need to be seen to be educated and qualified to be planners otherwise we run the risk of having educated and qualified accountants taking over our role and our clients as the client sees that the accountant has the education and the knowledge to handle both their accounting and financial affairs. After all the accountant in most instances knows the client better than we do as planners.
Lets just all get on board and get educated and qualified so that the clients regain the faith and trust in us that they deserve.
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+3 #5 Reality 2016-03-29 11:49
@ Peter S "Is there such a thing as only "working in Risk and basic superannuation" ? I think this really gets to the crux of the questions around whether we are a profession or not.""

Yes, its basically what the whole industry is trying to get away from. You should either be a risk only adviser (and make that clear to clients) or be a completely holistic planner not limited to 'basic' advice.

Providing 'basic super advice' aka flog an average product and tack on an adviser fee should not be "experience" that should be grandfathered.
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+2 #4 Andrew 2016-03-29 11:38
One of the things that concerns me about the education standards is that they are only looking at degree is that a business or finance based. Personally I have a bachelor of science degree with majors in pure maths physics and psychology and my understanding is that this doesn't give me any standing as far as the education standards are concerned. In this Day and age the ability to be able to understand mathematical principles and the use in finance as well as the psychological issues of dealing with customers or clients is just as important as knowing what the economic status is of the country. I believe that everybodies circumstances need to be assessed on a case-by-case basis.
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0 #3 Peter S 2016-03-29 11:33
Is there such a thing as only "working in Risk and basic superannuation" ? I think this really gets to the crux of the questions around whether we are a profession or not.
Experience should be considered but perhaps only at a licensee level in recruiting or retaining an adviser because experience is too subjective to be part of a formal recognition. But I think this is what Jenny Brown is saying.
Education standards alone will not fix the industry's perceptions and realties. Nor will ethics training. We need must stronger emphasis and punitive action around adviser audits, complaints history and financial position. The good advisers and good licensees will have no issue on these areas being stricter but the "suspects" may "take the hint".
This is our chance to not repeat the cornflake packet CFP experience so let's take the pain and get on with it.
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+2 #2 NAS 2016-03-29 10:34
Consideration also needs to be given to industry professionals. Those of us in the institutional space, many are former advisers that returned to corporate life and provide technical/compl iance/service and support to Adviser businesses.
Institutional careers have a history of coming to an end usually sooner than we may like, how would we be treated from an education or experience perspective should we want to return to a career as an Adviser.
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-6 #1 Graham H 2016-03-29 10:13
How about those advisers working in Risk and basic superannuati0n areas, and within 5 years of retirement. (with say 30 plus years experience?)
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