On Monday (10 January), AIOFP executive director Peter Johnston called on financial advisers across Australia to put aside political differences in a bid to unite and incite change within the sector.
Mr Johnston said advisers have suffered “the most sustained, vicious and inequitable political attack” by the current government over the last seven years and that the industry must seek amendments to the many changes introduced to the industry pre-election.
“The AIOFP is embarking on a political strategy to not only protect the current rights of the financial advice industry and their clients but seek amendments to current legislation to make life easier for advisers and consumers,” a statement released on Monday (10 January) read.
“Our political campaign is heavily reliant upon advisers becoming ENRAGED with what has happened to them over the past seven years and then ENGAGING their clients to understand why their fees have escalated, what the banks are trying to do to advice delivery and what this government is doing to advisers and small business in general.”
The AIOFP has outlined five amendments as part of the new strategy, including:
- The FASEA exam to be held after the degree course is completed
- Advisers with more than 15 years’ experience do not need to complete a degree course but must complete an ethics unit
- Risk commission to be increased to 85/20 per cent with a 12-month clawback
- Opt-in to be every three years but clients can opt out at any time
- The proposed compensation scheme commences from 2008 as commissioner Kenneth Hayne instructed
Mr Johnston added: “As recent events have demonstrated, the political window of opportunity to force change is well and truly open with a maximum of five months before the election.
“This is the ‘business end’ of the cycle where deals are done and self-interest is rife, it is no time to pull any punches around the facts and what we want.”
In December, the Labor Party promised to significantly ease the education requirements on existing advisers by axing the need for experienced advisers to return to university that received mixed reactions by the industry.
Readers of the ifa have referred to Labor’s proposal as both “ridiculous” and “sensible”, but the Stockbrokers and Financial Advisers Association (SAFAA) applauded the move with chief executive Judith Fox calling it “good policy”.
I do not know Peter Johnston but I must say I have been advocating for the AFA to fight along similar lines, The industry has taken a battering now for at least 7 years. The FASEA exam is nothing more that trickery. If you do not believe me just check the 48% failure rate for November exam. This is not just about education and certificates on the wall, it is about an overall power game and the libs are asleep at the wheel.
Who ever wants to complete more education be my guest. But stop trying to lecture the rest of us who are good at what we do with your ideas. At 61, I enjoy what I do but I’ve got no intention doing more studies.
Much sense in the article and much debate.
Not a great deal of empathy in some of the debate – which is concerning, is it not, for a financial planning ‘industry’?
If we agree on the importance of the experience – perhaps the trade off is 3 years experience post degree.
This would be far more valuable from what I see out there and coming through than the degree for oldies.
Especially if the younger cohort want to put their hand on their heart and still call themselves a profession!!
I’m coming across a few Advisers that started in the industry around 2016 having a Bachelor’s Degree in Commerce being the most vocal being opposed to change. Just do the additional study please, with exemptions it’s nothing.
Perhaps we can remove 961B(2), then we’d all have some time to meet the education requirements.
And once again we are a fragmented industry??? profession??? not really sure what we are. We should have all been working toward the requirements – they are what they are and have been known for a fair amount of time now – the need should be to focus on issues around red tape, reducing cost of advice – structuring of licensing in the future – in my opinion.
No thanks. I don’t want the AIOFP advocating on my behalf as an adviser.
I do as I want an association that actually fights for us…. what do AFA and FPA do? Sweet FA
Who would you suggest?
Personally, I’d like to be a member of a Professional Association that is AGAINST this proposal. I’m not sure which one that is yet or even if there will be one.
That tells you how much I think this ‘carve out’ is a poor idea.
The one massive elephant in the room that continues to be ignored here is AFSLs. Dante from FPA mentioned the issue and the costs these parasites are to our industry and didnt gain traction. I have no idea why but in my experience these people are like the mafia .. they take too much … they have been feeding off advisers for far too long … if our industry is to become professional like accountants and Lawyers then we should not be regulated in a similar way to them … a centralized body , and we are responsible for our CPD and conduct and PI insurance etc …. that should not represent the cost it does currently. Kill these parasites and make them earn their own revenue like we have to
Too much political influence, money talks, FSC etc, etc, etc. You know the drill.
Totally agree – the AFSLs charge you fees and blame you when things go wrong .
As self licensed Adviser and I can tell you you are misguided…that’s a distraction, the issue is not licensing it’s bad regulation. ASIC has five websites, and the FPA suggestion was based on popular policies at a time where they were members were leaving in droves. Don’t get distracted we need bad legislation removed.
Sorry Peter, I can’t support you. It seems as though all you are interested in doing is trying to help the older cohort extract the last little bit from their clients before they retire.
We can’t become a profession while there are advisers without a relevant degree. They still have another 4 years and they have known for the last 10. These advisers never had any intention of sitting the exam, regardless of the pain this caused the industry as a whole.
If these advisers know as much as you claim, then passing a degree should be a walk in the park for them anyway.
Also, suggest the AIOFP focus on things that will help those advisers that will still be in the industry in 10/15/20 years:
Self Licencing
Completely separate product from advice
Get rid of the red tape we need to deliver advice
Anyone wanting our industry to be taken seriously would oppose the reversals in education standards! We should be banding together to show the politicians that the vast majority of us are happy with the changes and do not want it reversed. I’m 57 with 26 years of experience and have just completed 9 subjects out of 10 (I have a adv dip so got 2 credits) for the masters, if I can do it anyone can!
Many of us have done higher education many years ago long before it was compulsory. We resent being forced back to uni again to do second rate courses from third rate institutions. We resent that FASEA has deemed our previous education worthless, and many of the Board members will financially benefit from that decision. We resent being lectured to by people who have chosen to avoid higher education most of their lives, and are suddenly promoting it with missionary zeal. We would normally be opposed to education exemptions based on experience alone. But if an experience based exemption is what it takes to avoid being forced back to uni again, so be it.
Why not advocate for your degree to be recognised rather than focusing on dropping the standards for experience?
This is the correct answer but to date FASEA has refused to acknowledge most historical degree’s. Eliminating the need for a degree is not the answer but neither is basically ignoring historical study.
So done a degree that isn’t relevant? Nothing studied finance, economics, accounting, law etc? I cant understand how a degree isn’t recognised? please explain.
Been trying for years to no avail. If a reasonable RPL policy was on the table now as an alternative to the experience exemption, it would be far preferable. But when you are a powerless victim of biased regulatory persecution, which all advisers unfortunately are, you sometimes have to accept the sub optimal offer that’s available rather than waiting in vain for something better.
Got my quail’s from an overseas uni assessed externally and then approved by FASEA. It’s not that hard.
Why on earth are they pushing to reduce the education standards again? It makes no sense! Push the industry into professionalism and not hold it back.
Suggest you all send a message to your federal Liberal member asap telling them that you do not intend to vote for them or preference their party at the next federal election and your reasons why which are likely to be based on what they have done to our once great industry. That can only help this campaign to “enrage” the government into action…
This article is a bit misleading. If I can recall all sides of the political divide have attacked planners and demonised our industry. I do not trust labor or the libs. I can guarantee that if labor get in they may put up legislation to the senate. It will not pass because of the greens and they will just say oh well we tried. Don’t trust any of them.
You have a choice of one party (ALP) which has stated financial planners are basically criminals and they want to eliminate the role and the other which hasn’t said this but is acting accordingly. It might make the Greens look good
Oh goodness no! Only ESG funds will be on the APL! 😉
is this the least educated sector of planners?
The above 5 amendments outlined seem eminently sensible to me.
At the moment, the AIOFP can only be an “Industry” Association, definitely if it supports the education rollbacks.
If it wants to be a Professional Body then it needs to support the pathways to professionalism that have included the Fasea Exam and now the Education criteria.
I can’t believe we are still talking about this.
Move on everybody and just do the courses.
You have until 2026
I can’t believe that some advisers and the AIOFP think they can be a professional without professional qualifications.
This engage and enrage is just the thing that put our quest for professionalism back years. I do not support it.
However the red tape is the issue we should be focusing on….but only if we are professional. Chicken and egg stuff isn’t it.
reply
Agree with your comments on the not rolling back the degree requirements. Apart from that concur with Peter’s recommendations
You just can’t be serious. This industry has been decimated and the obvious proof is the huge numbers of advisers voting with their feet. And they are not in the pre retirement age bracket either, many are younger and have simply had enough.
How can you expect advisers in their 50’s and 60’s to go back to university just to remain in the business especially when they already have tertiary qualifications from many years ago?
Do doctors and lawyers have to go back through university again when they reach their 50’s and 60’s?
It’s just ludicrous.
It takes enough with the compulsory ongoing training and education now without needing another degree which is just more fees going into the profits of universities and pockets of overpaid academics.
A piece of paper with some letters after your name will never make up for experience together with ongoing required readings and conferences.
Doctors and lawyers don’t need to go back to uni – but I wish they would. The amount of older medical specialists I’ve dealt with that are woefully out of date on treatments and technology is staggering. I’ve had the misfortune of being treated by several. Only after several years of sub-par results I got second opinions from some younger professionals who changed my life with up to date knowledge and best practice.
If only doctors were forced to do as much CPD as financial advisers are.
What lawyer or doctor only has a diploma or advanced diploma? If that was the case then yes we would expect them to go back and get a degree.
No one is asking advisers to do full 4 year degrees, most will only need to 6-8 subjects if they start now that means only a couple of subjects a year (not really that hard).
It doesn’t matter what AQF level it is, it’s the age of the degree that is relevant, not how much you paid for it.
If a doctor was found not to have relevant qualifications (besides being barred for life), they would most certainly have to go back to uni to get them if they wanted to be a doctor.
Sorry county advisor but how would you feel if you did DFP the old way not through some short course. Did 30plus hours per year in CPD then have some nobody tell you you need to do the lot again. Please. This is another policy failure and our apparent industry bodies all need to be sacked.
Agree CA. Also doubt 18,000 advisers are going to have an impact on the election, especially when the pollies can point to the FFNS stuff that went on.
The FFNS issue can be countered by the Parliamentary Pension scheme. What do retiring politicians actually do for the money?
You are aware that this scheme is closed…………….don’t conflate two different issues to distract from the main point
Just for the record. Over 60 plus 35 years experience.
Passed Fasea in 2019.
Did the original DFP 1-8 and received CFP. Have done many CPD and short courses over the past 35 years.
Only received 2 credits but completed the Grad Dip and decided to do the Masters as well and completed early last year.
Experience is one thing, and this should help most advisers get through all this with ease.
After all, most only have 2-6 units to do anyway and you have until 2026.
Once everyone does that, our voices will have substance as they will be from genuine professionals.
As I said in my previous post, I am sick of advisers who want to be called professionals but don’t want to meet professional qualifications.
Lets all just move on.
Those that bleat here are obviously the least educated and the AIOFP are just fueling this lost argument.
15 years experience makes sense, although 10 is plenty, but if 15, is that as at January 2026?
So essentially the AIOFP want to do what everyone is up in arms about, stopping the need for many advisers to need a degree. It is a spit in the face of making the industry a profession! I agree 15 years should get a bit more credit but getting rid of the need to do extra study, it’s a joke! There is plenty of time left to do 6 subjects it’s really not that hard!
Why should a FASEA exam even be necessary after a 4 year degree? So your proposal is that someone spends 4 years of their life which could amount to nothing if for some reason they cannot pass a FASEA exam…doesn;t seem viable to me. The Fasea exam should come first,…
What do you think the insurance companies will do to premiums with a reduced clawback period and a higher cost of distribution?
Opt in every three years? If you’re seeing your clients annually like you receive your fees / commissions then optin should not be a problem. Suggest you write up a 12 month contract of advice / service and simply renew that every year.
you obviously don’t understand that a 4 yr degree teaches you about the theory behind investments, etc, whereas the FASEA exam finds out if you know the regulatory environment you work in. Two really different things.
I have two degrees, CFP, F(Ch)FP, amongst others and am already full qualified to continue past 2026.
I think you missed my point about managing risk…
Think about it , would you spend 4 years studying how to be a lawyer (for example) and then have to sit some ‘other’ course that you should be able to do ‘in your sleep’ in the course of a week but failed because the exam isn’t really testing you on your knowledge acquired over the course of the degree?
It’s like saying to someone that they should spend 4 years learning everything about combustion and electric engines, the design of a motor vehicle, and how to operate one…and then send them out to pass the ‘learners’ test to drive on the roads…should they fail, they aren’t allowed to proceed with being an F1 mechanic…
But that’s exactly how every other profession operates:
a. Complete basic degree
b. Get entry-level employment
c. Complete further study/exam
d. Get admitted to the profession
Has Shoes, passing a law degree does not qualify you to become a lawyer, the same as passing an accountancy degree doesn’t qualify you to become an accountant. Why should it be different for a financial adviser?
Nearly every profession that we should be aiming to mirror has three components:
1. Education about the theory behind what we do
2. Education about running the business/sticking to the law
3. Experience
Using your example of studying law, after their degree, they then need to go through a Practical Legal Program that involves not only work experience but further study and exam.
If there are any financial advisers who aren’t enraged by what has happened by this Liberal government, then they are like the turkey looking forward to Christmas.
The new taxes/levies and nonsense red-tape imposed on advisers by the Liberal government offers no benefits to consumers. Frydenberg has lost all control of ASIC.
totally agree, it’s not just the education part (that is a side track) but the level red tape and commercial disrespect by government is absurd. and for that I fully support what the AIOFP are trying to achieve.
“Relevant Providers”(advisers) should be increasing based on constituent demand, not decreasing due to bureaucracy.
This is good news , the industry is needing some strong voices