Shadforth Financial’s Charlie Fraser and Mediq managing partner Ravi Agarwal, told media at a Zurich roundtable yesterday that new education standards need to bear a strong resemblance to the actual work conducted by advisers.
The pair, who won the AFA’s Adviser of the Year and Practice of the Year respectively, responded to Zurich head of marketing Richard Dunkerley’s questions about FASEA by cautioning the new standards could present challenges for the industry.
“On the face of it, I think [the new standards are] a great outcome, and we need to raise the education standards absolutely, but I think we need to make sure the employment experience utilises the expertise that people gain,” Mr Fraser said.
Mr Fraser compared the introduction of a degree requirement for advice to a similar change in education standards for Australian nurses.
Nurses were then required to complete an “extraordinarily rigorous university degree”, Mr Fraser said, before entering a professional environment that shared little in common with the work environment they then entered.
“They basically come out almost as a doctor and they’re now wiping peoples’ bums,” he said.
“The difference between a good adviser and an OK adviser is not their ability to spout off technical knowledge, it’s their ability to communicate.”
Mr Agarwal added that current advisers must play an important role in “crafting that educational experience” to ensure its relevance to the industry.
“I don’t think it needs to be paraplanning or analytics, there can be a huge amount of soft skills involved in that, there can be less of a dichotomy between what the actual experience is compared with the educational pathway,” he said.
We do not appear to learnt from the past. When FSR first came in back in 2002/04 – the intent was to have competent advisers.
Competency is not just knowledge (ie education) it is also having the relevant skills (the ability to apply knowledge) and attitude (putting client first, good moral compass, etc). Addressing and increasing the knowledge thresholds, without addressing the other two will make no difference to the industry/ profession.
Well might these changes be about increased adviser literacy, but in equal measure, they are about creating a barrier to entry. Somebody who is determined to to act unethically will complete all this training and still do so, but the need to undertake significant education and undertake a period of supervised practicing will certainly reduce the number of ‘fly-by-nighters’ who see an easy opportunity to feather their own nest.
I think raising the barrier to enter the profession are in everyone’s best interest for sure! I also agree with having the same bar set for existing financial planners…the problems that plague our industry are not as a result of 24 year old with masters degree it’s with SOME of the old and bold that think just because they have being doing the business for years that they should be exempt from demonstrating a minimum level of competence. to continue the medical theme if there were issues with some doctors and the treatment given to patients the first step would be to test and confirm the high level of skill we expect from them. the problem is as an industry the base level is and has been far too low for too long now. Yes there will be some who can’t get over the bar but that is the whole point of this exercise! If you are one of the old and bold who thinks they have all the experience they need to do the best for their clients then what is the problem with validating it with education standards??
Last time I checked ‘Educated’, advisers already have an annual requirement to undergo a minimum number of hours training so its not like they’re just out their in the market place, providing prehistoric advice without updating their knowledge areas.
To support your argument though, I must say I’ve heard some stories where old riskies are selling IP Policies with Age 65 and Age 70 Benefit Periods but not including ‘Claims Escalation / Increasing Claims’ optional extra in order to save the client a ‘few bucks’.
Honestly, that’s pretty bad advice in my opinion but why wouldn’t the life insurance companies selling these policies not query that with the adviser?? Even have the BDM contact the adviser to explain the possible outcomes at claim time of this very inexpensive ommission?
Life companies are too quick to handball the responsibility to advisers in my opinion yet ping us for anything that goes wrong. Some leadership and ownership by them would certainly go a long way to fixing the ‘so-called problems’ this industry appears to have!
Anon, I agree with the first part of your statement but then you went way of track. A BDM is not an adviser and has never met the client so you are unable to assume that the conversation was not had and in fact the client decided to save themselves a few bucks even after the adviser has given the advice in a SoA to have ‘Claims Escalation / Increasing Claims’ option.
An advisers job is to advice and a BDM’s job is to flog their product.
maybe ASIC shoudl review every SoA produced prior to presentation to the client!!!
I partly agree with this but BDM’s are also guiding advisers with a lot of information that ultimately becomes advice and yet they and the people that manage them are woefully under qualified. Many of the BDM’s or managers don’t even have the basic DFP. I think any insurance company employee who is interacting with advisers should have to meet the same qualifications as advisers. This should include BDM’s, Trainers and senior managers of insurance companies. For example how can a BDM or trainer get up at a PD day, present on strategies or product detail that the adviser will then use to advise without being adequately qualified?
It would be interesting for IFA to run a poll on this.
If you rely on what someone says at a PD and then implement it as advice, you have no place in this profession.
I take what a BDM states at a PD day as 1 half is Bull and the rest as Sh*t.
I think that those ‘bringing in’ legislation to force higher educational standards should be compelled to quantify the improvement that the increased standards will bring about and be highly specific as to where exactly improvements in advice will be seen.
They will never do this because they can’t.
Motherhood statements about moving Financial Advice from an occupation to a profession are meaningless.
That said, it is was never about improving Financial Planning but rather it was about enforcing an ideological belief.
Logical argument will never defeat the current ideology.
IFA I am also surprised you would publish that comment.
IMO, It’s a start but needs refinement. Based on the current requirements for new advisers from 2019, new advisers required to have a Bachelor of Financial Planning or similar, will be fluent in Financial Acronym.. FSG,PDS, SOA,ROA,,FSCG, Opt IN, FDS, PDS etc. They will also know what paragraph to put where in a SoA. As the new requirements exclude a Bachelor of Business, a Bachelor of Commerce, a Bachelor of Finance, I suspect very few would appreciate and have the ability to read a balance sheet, and appreciate how much debt a company may be carrying and the implications for investors.
Get a grip. Charlie wasn’t degrading nurses, he was merely raising a point about education being relevant to the role. Kinda like – an adviser needs to study derivatives when they only wish to advise on insurance.
Didn’t say he was buddy.
sorry, replied to wrong comment. Meant for Liam Shorte.
Charlie Fraser you just made yourself sound like a fool and upset one of the most respected professions in the world. You obviously have no bloody idea what nurses do and just demeaned them in your comments. My wife was an intensive care and cancer specialist nurse for decades and now is in mental health helping brave soldiers, airmen, firefighters and police who have suffered PTSD to get through the night without taking their own lives or affecting their families. To say nurses did degrees to only end up wiping bums is a load of crap (excuse the pun). You should apologise publicly.
Hi Liam. Yes, you are right that comment didn’t come across as intended. I didn’t wish to demean any profession.
Charlie, thanks for reaching out privately to properly explain the context of the comment which had been relayed to you by someone else. Clear you are a decent person and happy to withdraw my angry response in the circumstances.
I totally agree great to see the education standard lifted but what 60 year old wants to sit in front of a 24 year with a masters and no experience about life and the journey we take on. There is a lot to be said about experience and not just in the industry but in life in general. Congratulations guys on your win. Keep up the great ethical work. Eileen
Well said Charlie Fraser and furthermore – when will ASIC and other regulators realise that education fails to guarantee ethical standards. There are plenty of well / over-educated crooks out there. The new education standards are over the top. Builders don’t go to plumber’s, concreter’s or tiler’s school yet all are involved in the construction industry. Risk advisers having to learn about estate planning, investments and super is exactly the same.