The executive director of the Association of Independent Financial Professionals (AIOFP), Peter Johnston has branded younger advisers “elitist”, slamming them for their apparent disapproval of Labor’s plan to axe the need for experienced advisers to return to university.
Speaking at the AIOFP’s conference in the Hunter Valley last Wednesday (8 December), Labor’s financial services spokesman, Stephen Jones, said his party would not require advisers with 10 years of experience and an “unblemished record” to complete a university degree to practise.
Now, in an email to parliamentarians, Mr Johnston expressed his dismay at the lack of “compassion” younger advisers have for their older peers who, instead of traditional university-style education, boast “life experience”.
“It is unfortunate that some Elitist Younger Financial Advisers [EYFA] cannot find any compassion or patience for the older adviser,” Mr Johnston said.
“How many times do you hear university graduates say ‘most of what I studied at uni has no relevance to my career…’ … That is why new entrants have at least 12 months of training before being allowed to give advice to consumers, the curriculum content they studied for over four years is largely irrelevant.”
Reflecting on the FASEA exam, which Mr Jones confirmed Labor intends to keep, Mr Johnston argued it needs to undergo some crucial changes.
“Whilst most theoretically agree a FASEA exam is a good idea it is time to adjust its original objective and reflect that in the exam content,” Mr Johnston said.
“It must move away from trying to intimidate ‘any adviser out of the industry’ to being specific to the [adviser’s] field of expertise and testing the relevant ethical/technical information. It also needs to be set by an industry panel not an academic who knows little about our industry.
“The EYFA fraternity should stop being the Christmas Grinch and demonstrate some respect to experienced Advisers of all descriptions who have been the backbone of this industry for over 40 years and have performed to a high level.”
Also last week, Mr Jones assured advisers Labor would also double down on the red tape in advice, improving both cost and accessibility.
His words are considered a major shift in Labor’s policy, as the party distances itself from its greatest opponent, the Liberal Party, ahead of next year’s vote.
I’m just trying to figure out how all this fits into a future where platforms will be running big data recommender systems (sophisticated versions of Amazon /Netflix).
If your timeframe is less than 5 years, not much to worry about.
More than 5 years I’d think it’ll affect you.
Already, in 2021, the Federal Treasurer is saying that Googlepay, ApplePay and Wechat are affecting the sovereignty of our payments system. That’s a sign that something is cooking at the Federal level.
Where will all this lead in 5 years time? The AIOFP is way off track in this regard. Or am I the one that is off-track?
So quick to blame the young whipper-snappers! I consider myself to be a ‘young’ adviser, and fully support a model which allows for a transition of the older generation of advisers… allowing them to retire with dignity. Not the BS that the Coalition has forced.
I WHOLEHEARTEDLY SUPPORT THE REQUIREMENTS because our industry always has and always will experience rapid change and require continued learning, adaptation and personal growth – soft skills, technology, technical/legislative requirements, etc.
If you’re not the sort of person who can manage these study requirements, then you’re not the sort of person who would be suitably keeping up with the other changes in our industry either and I’d rather see you exit so we can become a genuine profession, retaining only the best professionals.
P.S. I’m an adviser with 20+ years experience, who’ll learn almost nothing from the required study, and I’m not finished yet, I’ll have to bear the time and financial cost of completing the requirements. Still support the concept but!
Bravo sir, thank you for leading an excellent example for how an Adviser with 20+ years of experience should be reacting to the education requirements!
Education is the the key to being a professional. Time for the vested interests of those that do not want to lift to go. You have had enough time. I have a degree and still needed to do more. In our licence we accept embraced and moved forward and we are all the better for it. I still have clients walk in my door that were sold stuff! It needs to end. The age of advice is now.
agreed!
How are you going to prevent client “that we sold stuff”? Product providers are are spending more money than you will ever earn on delivering “Advice” to their members – clients if you get the ones that get away.
This comment thread is popcorn worthy material.
In recent times it has been one industry stakeholder was turning on another …. insurers v APRA, advisers v ASIC, insurers v advisers and so on. Now we have advisers turning on each other. I can’t wait for the main event: insurers turning on each other… which brand will break away from the cartel first?
Are these the same elitist younger advisers only pushing index funds, excluded unlisted and genuine private asset funds in the name of cost saving. How’d that work out last year !
I’m waiting for these index based fixed interest funds to return a real negative in the next 3 years blind Freddy could see this coming but there’s a lot of money ploughing into fixed interest index funds that are loaded with record levels of government bonds on the wrong side of the yield curve
Good luck to the young advisers when you lose your clients fixed interest money
You seem to be criticising all index funds, and yet your real issue is with index based fixed interest funds. Two really different animals.
I also wonder whether last year you were one of those criticising the Industry funds because of their unlisted assets.
Generally speaking elitist young advisers love index funds. All I’m pointing out is these advisers are holding a time bomb. Best not to throw stones whilst living in glass houses
I was supportive of unlisted last April and still supportive today. Drawdowns were lower. A good adviser switching from unlisted to Listed last May did very well
I’d love to receive an explanation from these younger advisers, as to how fixed income actually works as an investment and all its benefits and risks (e.g. duration risk). The best many could manage is that it’s a ‘low risk’ asset class. And this is just as central banks are about to take away the punch bowl.
It’s funny reading this nearly four years later.
Oddly it was a lot of the younger advisers who understood how ‘duration risk’ actually works in a bond portfolio in a rising interest rate environment.
Interestingly, if you talk to ‘experienced advisers’ – how many of them actually know what duration risk is even now.
In my experience, hardly any.
Also, the transparency of a lot of unlisted assets is absolutely rubbish. There were some changes made to the handling of unlisted assets since your post was made. Smoothing a drawdown due to a delay in-revaluation shouldn’t be a strategy anymore.
They can’t blame the banks when this one comes back to bite
With so much RPL through FASEA, I’m struggling to see what the problem is. We’ve come too far already. I have 15+ years, and it’s 3 subjects before 2026. That is not a problem.
If you are in the 6-8 subjects category, there’s probably a good reason.
If the AIOFP’s message is to complain about this, then good luck to your members attracting candidates for business succession!
If you are in the ‘3 subject’ category, will you do the whole of the Grad Certificate (4 subjects inc Ethics) to add a qualification?
I’ve completed three of the four bridging course units needed to meet FASEA’s new education requirements. I have learnt absolutely nothing that will make any difference to the standard of advice and care I provide to my clients. Nothing. Just a whole lot of academic irrelevance. The stuffed shirt and look at me in my Zegna suit brigade are keen on hanging their ego’s, glossy certificates and FASEA uni degrees on their practice walls for all to admire.
AIOFP has to stop protecting the lowest common denominator if it is maintain credibility. The industry and the environment that we exist in today are not what existed 30, 20 or even 10 years ago. The industry back then had the lowest points of entry of any industry and that had to be corrected.
I’m also getting very tired of the advisers who think that the quality of advisers os based on their client relationship skills. This “skill” is not an exclusive domain of the so called “older experienced adviser”. But an “older experienced adviser” who has continued to move with the times, continued to improve their industry specific knowledge ( and I don’t include a lot of free kick PD day sessions ) as well as understanding the greater world should be the ideal adviser.
And of the very many advisers I have consulted with who came in under “low entry barrier” periods, why have is many been very poor business people? Sure they know the definition of TPD but their business acumen was very low. Should we have such advisers dealing with the public?
Geez, its hard to take anything the AIOFP says seriously nowadays. Instead of being a true professional body, isn’t it just a disguised distribution scheme for related party party products?
Full Disclosure….if the older advisers are asked to leave the industry en masse that provides large commercial opportunity to other advisers who satisfy the conditions to remain….oh thats not an issue 🙂
Degree means nothing, as what I have studies in my accounting degree has not helped much in my past 20 years of financial planning
I wonder why an accounting degree wouldn’t help much in financial planning?
Personally I would have thought being Elitist would be expecting different standards to apply to me because I have managed to not die rather than expecting everyone have comparable qualifications — which is what the “younger” advisers have been proposing.
You had 2 choices when the rules were brought in (1) accept them and do what needed to be done (2) whinge like a 5 year old having a tantrum. The ALP obviously supports 5 year olds having tantrums because it is easier to do so than actually fix the issues facing financial planning.
Also until the detail is provided and the legislation passed I wouldn’t be stopping your study because most people who aren’t financial planners don’t support a 4 day diploma being sufficient to be a financial planner.
At least this means I won’t be paying the AIOFP money as I was considering joining them as a member.
Grand fathering has existed n all other industries as they have tightened up their qualifications eg Accounting as well. So why the kick back from young bucks?!?!?!?
Research shows that most AFCA claims are against advisers who was under 45 when the advice was given yet somehow they want to blame those 57+ Only the inexperience say experience doesn’t count.
As Alexander Pope wrote in 1711 -“A Little Learning is a Dangerous Thing ” I guess the classics are not available from online universities within those trendy degrees
This is part of the problem, you see degrees as “trendy”
Touche
I find it utterly staggering that some Advisers still think they should maintain the right to practice without a degree. Shame on you for such disregard for the overall profession based on self interest. And can people stop saying that only the Old Advisers have the personal skills to manage client relationships or navigate a GFC event. That is absolute rubbish.
I agree with the first half of your comment, but seriously, for anyone with less than 13 years experience, you literally cannot learn how to manage a business through a GFC type event nor coach clients through such times without actually experiencing such times in real life. There’s no text books or theories that can prepare you GFC type events, and March 2020 (COVID) was a day out at the fair by comparison, it doesn’t even count as a bear market. I do support degrees for the professionalisation of the industry, but in real life, only ACTUAL experience counts. Get the degree for the industry, but get experience to actually know how to run a business and manage clients and cope yourself. Most planners I know under 35 would struggle with their own losses in a GFC type event (as they are all 100% growth investors who over-watch the market and are over active and have only ever known bull markets), let alone dealing with the value of collective client FUM dropping by perhaps $30-50+ MILLION.
Given the overall benefits for the Australian public and Advisers and the workload involved… it’s a reflection on those advisers that keep moaning about the requirement. Now, I think we need them to leave. If you’re going to leave, and don’t want the education, then just go silently into the night please…because the majority of your older peers have no sympathy now. Having to do 4-6 subjects ain’t hard. Let’s just move on please.
You can not be called a Profession without a minimum education standard for all – Pretty Simple Really !!!
You also can’t turn a industry into a profession overnight!
I am 65 and have been an adviser close to twenty years and have a clean record. I have a degree and am a CFP so I may be suitable to speak in both views. It may not be good to say four years uni study is irrelevant and that will do harm to the whole industry. [b]Think about the public image when you say someone with a degree in FP is not up to the job by a FP group.[/b]
In view of the older advisers, I would suggest some kind of bridging course for them so that they can study something they are missing while not a full degree (kind of high diploma) and that may serve the best interest of the older experienced advisers and the industry. Full exemption for the older adviser should be a [b]no-go[/b].
You mean a bridging course like that which FASEA designed for all existing Advisers, regardless of their age?
To Gavin: I mean formal courses provided by proper institution, not FASEA. To be frank, I have seen some fellow advisers struggle to read an SOA, tax rules, legal and tax implication of insurance in various capacities and investment mechanism etc. Study is a good way to improve their skills. I aim to be professional from day one when I join the industry and hope all my fellow advisers are true professionals too. I hate to see those bad advisers walking around. However, in this debate, please focus in how to improve the whole industry, not just different groups of advisers. This is not the time for old against the new, degree holders against non-degree holders or vice versa. [b] Please focus our energy to improve the profession and fight with the governing body to relax the rules to a sensible level, otherwise, there is no point to argue anymore because our industry will be gone in the very near future.[/b]
A laughable comment given those that don’t have any qualifications apart from the old basic RG146 never considered the public image and thought only of themselves…. and now when we’re over regulated and that same public can’t get advice you think we should be protective of those that continue to drag us down.
These elitist might have a degree but they certainly dont have any customer service/client relationship skills. This doesnt came with a degree, it comes with time and experience. This is how you build relationships. And yes, I do have an Economics degree from a proper university, with tutors and lecturers, not online and open exams, from 2 decades ago, along with 2 post graduate degrees in financial planning. None of this prepared me for what financial planning is all about, client relationships! By the way I am not old either, under 50, with 20 years in the industry, yet FASEA wanted me to do more exams because my qualifications were from 20 years ago (Whilst they forget the subject contents of a degree does not change regardless of how long ago it was received) and coupled with all my experience, i was still not good enough and needed to do 3 more of their revenue raising courses! What do the EYFA’s say to that!. Thank you Peter for caring and looking after us as no one else is doing that.
Good on you, an Economics degree is far more useful and to have two post grad degrees in financial planning puts you at the forefront of qualifications. You should not need to do anything else except your ongoing CPD training.
By the way I got my Economics Honours degree just on 40 years ago when a degree was really a degree, no googling plagiarism etc.
Plagiarism? The minute you submit an assignment these days it gets entered into a system that automatically checks your for plagiarism by being able to source other assignments as well as known reference material, journal articles etc. You might be able to get away with copying and pasting in high school but universities will catch you bloody quickly.
I have both the experience and relationship skills and still think this is a ridiculous idea
They could easily settle on middle ground to create a reasonable grandfathering provision.
15 years service by end of 2025
ASIC clean sheet
Must have passed FASEA and the Ethics topic.
Thats a sensible grandfathering provision that should have been applied all along.
Here we go again -water down the regulations and make a foo, of those advisers who have done the hard yards to study and complete all the requirements
Down the grandfathering rabbit hole again. I’ve seen the “support the faltering” clause introduced so many times in this industry and it’s considerably responsible for the less than stunning reputation that this industry has.
“Elite” – because I didn’t sit back and rest on my laurels collecting trailing commission on products and actually got off my backside and did the degree which we all knew (way, way back) was going to become mandatory! Something that everyone could have done if they had the guts and determination.
And before you all come at me with “at my age”, “with my experience”, “I had a business to run/children to raise/elderly parents/health problems” – I am an older adviser and still managed to do it while dealing with all the above and I don’t think my years of experience should ever give me a ‘free pass’ from striving to improve myself.
This is just Labor vote-buying and the AIOFP should hang their heads in shame for getting onboard with it.
Dear Elitist Eddy,
So you think all advisers in receipt of trails did nothing for their clients!! A very broad, ill-informed and dangerously inaccurate assumption!!
I would go so far as to call it narrow minded.
Agreed KC and Anon, narrow minded and obviously these advisers dont understand the industry and forget that we actually paid for the clients from licencess, and i am talking as much as $500k 20 years ago and also up to $1m only 3 years ago. So these EYFA’s think it is ethical for licencess to be selling registers with grandfathered commissions. These Elist’s are as corrupt as these licencess.
If you were buying grandfathered commissions you had rocks in your heads
I agree with Elitist Eddy. And Eddy didn’t mention trails but seeing you raised it there is no query about did some advisers offer something for their clients. But I’ve been in this industry long enough to know that the majority of on-going commissions were an unjustified free kick – fee for services ACTUALLY delivered is a far fairer systems for clients.
I stand corrected Eddy did mention trails. But ny other comments stand
I’ve been in the industry since the 90’s, and without question the overwhelming majority of clients who incurred the cost of trails received nothing in return for them. Again, trying to justify things from the ADVISER point of view (“I worked hard for my trails”) is putting the adviser before the client. Just as “Why should I have to get a qualification” is putting the adviser ahead of the profession. A true profession puts the client #1 no matter what, the profession #2, and only then the adviser. So many comments on here are “what about poor old me” and that is precisely what is wrong with our industry and why we have failed thus far to move to a profession.
Labor introduced the FASEA standard but surprising don’t understand that the education requirement is a Grad Dip.
As for the dismissal of “younger” advisers and the statement about irrelevance of the degree to the practice – higher education is not about being job ready, that is vocational education, a degree, grad dip, provides research skills, communication skills, analytical skills etc. If anyone expects their uni degree to be relevant by the end of their career they are delusional. Roles evolve and are now supercharged by technology. Those with a baseline tertiary education are better able to adapt. Change resistance is the issue here. Maybe FASEA should have mandated that all need to read “Who Moved My Cheese”.
So wrong!
So right!
I don’t know about that. Most of algebra hasn’t changed much in the last couple of hundred years.
I am far from elitist and definitely not young (according to my adult children!), however I oppose Labours proposed changes. Instead of sitting around and whining about how unfair the changes were, I got on with the study required to meet the requirements (4 units) and completed it within two years (whilst running a business). So it can be done. And should be done if we truly want to be called professionals. Any carve out is a slap in the face for those of us who have worked very hard to meet the new requirements.
Are they really ‘Elitist Younger Financial Advisers’ or younger advisers who are actively trying to improve the financial planning professional and clean up the mess made by their predecessors?
We need to stop making excuses for our poor history and reputation and start moving forward. The educational requirements are necessary to put a floor on what it means to be a financial adviser and lift the industry standard.
Peter Johnson should clear up the obvious confusion. Was Mr Jones correctly referring to a bachelor degree (not prescribed, yet), or did he mean to say an eight unit graduate diploma would not be needed to continue to practice after 2026, if an adviser had 10 years experience and a good record. Before we celebrate let’s elaborate!
Well, as far as I know you need a degree to get a Post Graduate Degree or Diploma.
Trying to promote advisers to support Labor, after the last 2 years we’ve been through in Melbourne, and now hitting out at the next generation of Advisers trying to come through… I dare say the AIOFP won’t have any members in the coming years and they will no longer exist! I was a big fan of AOIFP up until the last few months! AOIFP, you’ve lost me.
well said, the arrogance of some of the advisers with approved degrees and little experience is shocking. I feel for their clients when the next financial crisis hits and the all encompassing piece of paper leaves the with no experience in how to handle the consequences.
Handling the consequences is far more than showing a bit of empathy to say the FUM. I have been continually impressed at how good how competent the highly educated competent advisers are at supporting and educating their clients in tough times.
It’s not just ‘elitist young advisers’ who think that the degree qualification needs to stay. I have been a Financial Adviser for over 25 years. Over that journey we as an industry have faced major criticism and many, many different sets of legislative changes in order to try and bring our Industry to a Profession. There is no Profession without Degree Level qualifications. I’m sick and tired of the criticism, sick and tired of the endless legislation. We are nearly there now, yes it’s painful, yes it was difficult to work and manage a business and manage family obligations but don’t take Professionalism away from those of us who have doubled down, spent years and years building ourselves and our businesses, long hours getting new professional qualifications and working to meet these obligations because it’s too hard for some. Sorry but just do what has to be done.
Well said Liz.
10 years experience is not an “older” adviser and by 2026 it will be most advisers in the industry.
Labor should be offering prior learning for 1-3 subjects due to experience not just drop the need for study altogether, which means a CFP with ADFP would need to only do a couple of subjects.
An adviser with 20-30 years experience should easily fly through 1-3 subjects!
This BS from labor is just trying to buy votes.
What are the chances that the Libs will now have an epiphany and either match or trump this unexpected Labor position?
the whole thing becomes a question at the ACCC – uncompetitive trade practices behaviour. So how can the advisers that have left get back in..?
Can you blame them? Said “Elitist” younger advisers came straight out of uni to babysit said “experienced” advisers utilising basic knowledge provided to them by their degrees.
As an adviser and business owner of 15 years the thing that isn’t taken into account with all the push back is time. I for one have had to make the call to drop clients and increase fees on others to enable the additional time to complete the addition subjects required….. (with the extra red tape 60hr weeks are already the norm). So for me its fine but less Australians being advised and advised clients paying higher fees, is that what we are looking for?
It’s a short term pain (yes, very painful!) for long term gain of becoming a profession and earning Public Trust.
Who me!