Speaking to ifa, the licensee’s general manager Tony Beaven said he is concerned about the amount of advisers in the industry who only hold the minimum qualification, as meeting the new degree standard will be a “massive step”.
“The new standard is going to be AQF level 7 to 8. A financial planning diploma (DFP) is nowhere near that,” Mr Beaven said.
“There is a vast majority of financial advisers who only have a DFP. A lot of universities won’t accept you for a graduate diploma unless you’ve got a minimum education level.
“Advisers need to be looking at an advanced diploma, which will take them to AQF level 6, and then tertiary qualifications after that.”
Mr Beaven said the clock has already started ticking for those who need to study on a part-time basis, making it important for dealer groups to begin offering support.
“If we don’t do something to support advisers now, then in a few years’ time when this benchmark kicks in, we can be losing 20 per cent of our advisers in the industry,” he said.
“That’s quite frightening. We have to act now.”
Mr Beaven’s comments come after FPA head of policy and government relations, Ben Marshan, told ifa there is still a lot of uncertainty around what will be required of existing advisers.
He said until the standards-setting body is set up, anyone beginning the transition would be “starting in the dark”.
The education bill was introduced into Parliament in November 2016. The proposed law includes compulsory education requirements for both new and existing financial advisers, supervision requirements for new advisers as well as a code of ethics for the industry.
The bill will also mandate an exam that will represent a common benchmark across the industry and an ongoing professional development component, the statement said.
The new professional standards regime will start on 1 January 2019, whereby new advisers entering the industry will be required to hold a relevant degree.
Existing financial advisers will have access to transitional arrangements allowing them two years, until 1 January 2021, to pass the exam, and five years, until 1 January 2024, to meet the education requirements.
In reading the proposed Legislation, the new standards require Authorised Representatives to hold a minimum education qualification equivalent to AQF7. This, according to the Australian Qualifications Framework (AQF), is a Bachelors Degree.
According to the Australian Qualifications Framework Website, which is readily available for all to view, these are the following levels:
AQF5 – Diploma
AQF6 – Advanced Diploma, Associate Degree
AQF7 – Bachelor Degree
AQF8 – Bachelor Honours Degree, Graduate Certificate, Graduate Diploma
AQF9 – Masters Degree
AQF10 – Doctoral Degree
To prove my research, I submit the quote from the Explanatory Memorandum into the new Legislation
“Summary of new law
2.2 An individual is prohibited from being authorised to provide personal advice to retail clients on relevant financial products if they do not satisfy three conditions, namely:
• [b]complete a bachelor or higher or equivalent qualification [/b](or satisfy the alternative arrangements for persons with degrees from overseas jurisdictions);
• pass an exam; and
• undertake at least one year of work and training (the professional year).”
As the Legislation and Explanatory Memorandum explains, the up-skilling from AQF5 or 6 to AQF7 can be achieved through bridging courses. So it will not be as burdensome as is being depicted in this article.
The fact that someone in the industry today is content to only have a Diploma and hasn’t at least up-skilled to Advance Diploma is worrying in itself.
If we want to be considered a profession then we, as an industry, need to accept minimum qualifications. You don’t see Solicitors, Accountants or Doctors practising with Diploma qualifications.
Yes, all true. But where is the resistance to higher education coming from? i.e. what subset of the adviser population is resisting getting a higher qualification. and why?
The ‘experienced’ advisers that have sat on their DFP for years and don’t feel they need to upskill because they have practiced in the ‘good old days’ of product flogging which got us into this regulatory mess in the first place.
just goes to show- no one knows whats going on or are organisations turning a blind eye to education that already exits to meet the requirements. By the way, it should be no surprise that a high number of advisers already meet or exceed the requirements as we know them. The answer is simple- finish DFP 1 – 8 and move into a degree or masters and don’t be afraid to proceed. Dealer groups should be pushing those with the bare RG 146 education to step up or move on. There are a number of planners out there with the bare qualifications who have known for a while what is expected in the future, it is no different in any profession- keep up or move on.
Education is not hard, it is just time consuming. If you are really serious about this profession then you have basically 7 years to get your house in order for an existing adviser, more than enough time.
There really is no excuse, except, get off the golf course, get into the books and get qualified.