Advisers strongly opposed to the experience pathway are driven by a sense of being “aggrieved”.
In its submission to the government’s exposure draft bill to deliver its election commitment to recognise experienced financial advisers who pass the exam, have 10 years of experience, and a clean practice record, the Financial Advice Association Australia (FAAA) said many advisers feel “aggrieved” by the timing of the announcement.
“A key factor influencing member sentiment about this proposal is the timing of its introduction,” the FAAA wrote.
“The transition period by which time existing planners/advisers must have completed an approved qualification, commenced more than four years ago on 1 January 2019. Many existing financial planners/advisers, whose qualifications were not recognised by FASEA, have undertaken study during this period. Hence, some members feel aggrieved that they have invested substantial time and money in completing qualifications that now might not be required,” it continued.
The transition period ends on 31 December 2025, by which time all “existing advisers” must meet the requirements to be registered as a “relevant provider” or they will lose their “existing adviser” status for the purposes of the education standard.
However, the experience pathway proposes to fix that by deeming an adviser as having met the education requirements if they have 10 years (cumulative) experience providing advice between 1 January 2007 and 31 December 2021 and have not recorded any disciplinary action on the Financial Advisers Register (FAR) before 31 December 2021. Advisers would still need to pass the exam.
In its submission, FAAA also revealed that it had surveyed the draft legislation with 1,197 respondents, of which 50.9 per cent said they were supportive of the pathway, while 49.1 percent said were not in favour of the proposal as drafted.
However, of the 576 member respondents who indicated that they would rely on the “experienced provider” pathway if legislated, many were highly qualified with 73.1 percent currently holding a bachelor or higher degree or professional designation.
Additionally, the body highlighted that the previous education standard — ASIC’s Regulatory Guide 146: Licensing: Training of financial product advisers (RG146) — also significantly contributed to the opposition expressed towards the pathway.
“There is concern that some may still rely on the historic ability to be authorised to provide financial advice to retail clients by being “RG146 compliant”. There are many who question whether this is an appropriate level of education, and if it will impact consumer confidence in the profession,” it wrote.
Consequently, the FAAA expressed its disappointment that the government did not take action on its earlier recommendation for a competency-based experience pathway specifically designed for “existing providers”.
“We felt that this proposal offered a balance of greater recognition of qualifications completed by senior financial planners/advisers and their experience in providing financial advice to retail clients,” it said.
“Given these issues and risks, there is significant member concern about the unlimited application of the draft legislation and lack of a sunset clause for this measure.”
The FAAA is currently seeking three changes to the pathway, including a sunset clause; a requirement to complete an approved ethics course; and greater flexibility for long-term part-time financial planners/advisers.
It concluded that 78.6 per cent of its members, who responded to its survey, indicated they would support an “experienced provider” pathway if these changes were made to the requirements in the draft legislation.
Apart from the chaos that the life offices, banks and the Libs jointly worked on to deliver LIF which as predicted has destroyed the risk specialist advice sector, advisers are being represented by 2 ‘hand in the corporate troughs’ who when joining together didn’t have the most basic thought to do an ASIC search of their proposed name !!
I honestly feel we would have been better served and looked after if represented by the real FAAA!!! ( The Flight Attendants Association of Australia). You couldn’t make this up , old risky
The person you should be aggrieved with is the two former (failed) Liberal Superannuation Ministers, and no one else. The fact remains that decades of real experience appears to have a time limit, but as by magic, certain University Units do not. As an adviser I also feel aggrieved for doing three decades of CPE, which in many cases was far more useful than hypothetical FASEA exams or hypothetical uni units. Because all of this CPE was completed for squat, apparently.
This current situation clarifies the complete mess that has been created by misguided requirements and legislation pushed through based on skewed bias, agendas and ideology rather than common sense.
There are also a cohort of advisers who also have biased agendas.
FASEA was an abysmal experiment and disaster.
The inclusion of consumer biased board members of FASEA and an overwhelming interaction of the Ethics Centre sticking their biased ideology nose in the trough was a disgrace.
[quote=Julie]Our problem is, our fate is in the hands of the incompetent. As always. they will seek appeasement from the ill-informed. Meanwhile, the hapless (consumers) will, unwittingly, continue to pay the ultimate price.[/quote] The ultimate quote summing up what an industry is and everything that is flawed with Advice. Unable to determine their own destiny, badly regulated where the consumer pays… You think you’re a professional but I would say you’re a used carsalemen if you’re happy with that status.
That is a great quote if you are talking about government and a large portion of politicians….we are the consumers of a lot of desicions of the past. We need experienced advisers and driving more out does little to assist these consumers.
If they have 10 years (cumulative) experience providing advice between 1 January 2007 and 31 December 2021 …. are these the approved dates or just another proposal? I was working off 31 Dec 2019 which means I have only 9 years 11 months experience (but by the time I am evicted I will have 14 years 11 months experience 🙂 When I became an adviser I had more relevant degrees at Bachelor Dip and Masters level than the great majority of advisers. Whilst they were highly relevant they arent approved.
It’s fairly clear that FASEA’s education standards are the root cause of this whole problem. A better solution would be fairer recognition of prior education than the botched job done by FASEA. But time to implement a solution is limited, and expedience has prevailed.
At the end of the day most advisers who qualify via the “experience pathway” will be highly educated, and would have had their qualifications approved if FASEA wan’t so biased and incompetent. Most advisers with insufficient education have already been weeded out through the exam process.
If they have a carve-out for Super funds providing advice this should increase availability of clients getting limited advice and reduce the shortage of un-advised clients. In this situation we will not have to retain the experience pathway. The experience pathway should dumped due to this increase in advice. Finally, how will advisers who meet the experienced pathway and did the right thing, did the time to study and paid upfront get compensated? How can you call our industry a profession if you have advisers who have not got the required education?
“If they have a carve-out for Super funds providing advice this should increase availability of clients getting limited advice and reduce the shortage of un-advised clients. In this situation we will not have to retain the experience pathway.”
So, people with no qualifications being allowed to provide advice reduces the demand for qualified Financial Advice which somehow leads your logical skills to believe this is a good reason to dump those adviser with 10 years experience?
Sorry, but your argument is wrong – but you have lots of company it appears.
Aggrieved is going a bit far. At the end of the day if study has been done then that can be used as a marketing tool for the adviser and business. I seriously doubt that the study done has in any way increased the ability to provide advice and so I am not concerned if others don’t have to do it.
I have had one client ever ask me what my qualifications are. They dont care what is on my wall.
There are two issues here…Firstly, Advisers will be granted their 10-year exemptions and that will be the end of the concessions. Treasury will say “You got what you wanted what more do you want”…We won’t get any relief from the bad regulation, superfunds will get their carve-outs, and so it’s a case of what we gave up. The Second issue, we all know it was a case of CBA did the crime but we’re doing the time…yet the majority of advisers got in and did it, and felt that’s what professions all about, and professionals find the time…yet a small percentage are just leftovers being vocal, refusing to give up at best 4 weekends to complete a handful of subjects.
Our problem is, our fate is in the hands of the incompetent. As always. they will seek appeasement from the ill-informed. Meanwhile, the hapless (consumers) will, unwittingly, continue to pay the ultimate price.
That’s what’s happens to an “industry” where the entry standards were equivalent to hairdressers. You just take what’s handed out. You get the blame. Professionals working in a profession have their fates in their own hands.
Do consumers go to a doctor, lawyer or accountant if they got their qualification from the back of a cornflakes box? A 4 week online course no less. We will never be a profession! The band aid was pulled off 5 years ago on what was required to practice and deliver quality, educated advice. Not just generic cup of coffee advice I’m sorry….Understanding both side of the argument, as we all know quality advisers with ten years of experience who are of quality, but also understand many of the similar peers lack depth of knowledge and application. a reality….
100% agree with you and “Julie”. Study and passing exams should be the absolute base level. Years of experience and a clean record should just add to your marketability not give you a way out. As for your comment around “similar peers” I also agree totally – having been in compliance and auditing in my background I will support that the quality of advisers with the same number of years experience ( and “clean records” ) varies greatly – some I’d refer friends, family and business acquaintances to, others I would not.
Many experienced accountants dont have a degree and none were made to get one to continue practising.
Doctor’s, Lawyers and Accountants don’t have to update their qualifications to meet current standards. My ageing GP would have a fit if he wad told he’d have to upgrade his qualifications to match current “standards”
And how many doctors, lawyers or accountants who’ve completed their degree know how to do the job they studied for? How many after leaving university with their degree would be considered “good” at their profession? And how many would you trust with your life or those of your family members based on their pieces of paper? I’ve met, known and worked with Advisers (who go by many names – Advisers, Planners, Bankers, Private Bankers, Consultants, etc, etc) who have 20-30 years experience with no degrees and they’d run circles around any university graduate in this country in both technical knowledge and real world experience. Are they ethical? Yes. All of them – possibly not. The issue is that ethics cannot be taught in a way that sticks or shapes the individual, as a university-level course. You’re either ethical or you’re not. Most of it has to do with upbringing and parenting, not the teachings of a lifetime academic with no real world practical experience outside the classroom. Some of the biggest white collar criminals in our lifetime have been “professionals” with university qualifications. The experienced pathway should value the experience and the track record of the Adviser because we can’t afford to replace those with actual experience, with those who sat a theoretical exam and remembered a few key points.
I don’t bother asking what qualifications they have, have you asked? You rely on the presumption that the Doctor and Financial Adviser have met the professional standards to practice, and that they are registered under a professional body that sets the standards to practice in Australia.
Having said that, I think a sunset clause would be helpful to create the professional perception. I don’t agree existing advisers need to do the Ethic course though. The FASEA exam was all about applying the FASEA standards in an ethical way to everyday clients scenarios and current legislation. Give the exiting advisers a break.
I don’t believe the need to complete an approved ethics course is needed. For one, that is what the exam is supposed to do – to flush out those candidates who struggle with ethical decisions, and secondly, you’re either ethical or you’re not. An unethical person can pass a course in ethics. I would imagine it just gives them more ideas on how to work around ethical conundrums to pursue unethical ends.
A common perspective from those who haven’t done it – they don’t know what they don’t know. I assumed it would be a waste of time also, then I did it, and learned a lot.
Well just give up and leave if you don’t like the rules
The problem is that we were only given a short period of time to do a degree or grad dip along with all the other requirements such as the FASEA exam and the ethics module. This was all during a time of massive upheaval and removal of considerable revenue streams from our industry. In addition to this there was barely any recognition of the experience of advisers who had many years of experience.
Sure, we need to upgrade advisers qualifications but it doesnt have to be an all or nothing approach. Just give us a reasonable ammount of time to adjust, partial recognition of experience and a bit more than 5 years to get a 4 year degree under our belts.
You only needed a Grad Dip and most advisers completed that in under a year. I know advisers that had Commerce Degrees and DFP’s yet completed their Masters Degrees and suffered floods, illnesses, and marital breakdowns and they’ve completed it.
All three – that’s some bad luck.
8 units in year?? That would be a neat trick. Try doing that with a young family and running a investment advisory practice at the same time.
Am wondering if the cost is worth it. Mortgage brokers must be laughing at us.
A short amount of time???? The FASEA and ethics requirements all formed part of the formal training courses anyway. If you did the study, you were prepared for the exam. Those that are failing the exam most likely haven’t done the study. They go hand in hand.
It was announced 5 years ago. How much more time do you need? For some advisers it would have been 1 subject per year, but as they didn’t start it, hoping for divine intervention, they now have to jam it all in and rush it so that they also don’t learn anything.
If we are to become a profession, ALL advisers need to meet ALL of the criteria. No more carve-outs and exemptions. As pointed out by another commentator earlier, you wouldn’t “go to a doctor, lawyer or accountant if they got their qualifications from the back of a cornflakes box”.
Time for continuity and everyone to just get on with it.
No existing adviser needed to do a 4 yr degree… At worst an existing adviser who only had a 4 subject DFP had to do 6 or 7 subjects in a Grad Dip. If you were in that position, you had 6 yrs which is more than enough time, even if you only did one subject a year, let alone one a term…
Any requests for exemptions is for those who know they dont have the skills and/or smarts to pass.
The industry has known for more than 10 years that more education would be required. You didn’t find out about this 5 years ago.
Most have got stuck in and done it, but a few have left it to the last minute and now crow about there not being enough time.
A “short time”, like a decade yeah…..