Last month, Financial Services Minister Stephen Jones confirmed that the provisions for the implementation of the experience pathway would be ready for legislation by mid-2023.
“I can advise you today that I am confident that we will have provisions ready for legislation in the first half of next year,” Mr Jones said.
But not everyone views the experience pathway as a good move. Namely, the proposal which would equate the worth of a degree with 10-plus years of experience in the industry is by some considered a carve-out of the education requirements.
Namely, in its submission to the government lodged in September, the Financial Planning Association (FPA) argued against the pathway. The group said that while it considered experience as an important factor in competence, “we believe unassessed experience alone is an insufficient foundation to meet the objectives of raising the minimum education requirements for professional financial advice providers”.
“Financial planners want to be recognised for the competence, education and experience they already possess as professionals, not work in a profession where some practitioners are given a free pathway indefinitely,” the FPA continued.
Since Mr Jones’ latest announcement, the group has toned down its disapproval and is now seeking certain limits.
The group’s likely merger partner, the Association of Financial Advisers (AFA), has also conditioned its blessing on the introduction of a 10-year sunset period.
According to AFA, the experienced adviser pathway should apply to advisers with 10 years’ experience (across the last 15 years) as at 1 January 2022, who had a clean record, but it should be subject to a 10-year sunset clause.
Speaking to ifa, AFA CEO Phil Anderson said: “We continue to support this position, which we believe provides a good balance between the professional objectives of the advice profession and the need to retain experienced quality advisers”.
However, speaking on a recent ifa podcast, Eugene Ardino, CEO of Lifespan Financial Planning, offered another perspective.
Stressing that he does not agree that the proposed pathway could be a blemish on the industry, Mr Ardino said, “there are many things that make a professional”.
Conceding that “you’ll potentially have advisers that don’t have a degree”, Mr Ardino said: “You’ll have a lot of advisers that have degrees, just not financial planning degrees, so they tick a degree box.”
“I think there are many things that make a profession. There are many things that make a person or a practitioner a professional. If a client wants an adviser with a financial planning degree, well, there’ll be plenty of them out there. So horses for courses,” he said.
“I don’t see that as a big deal, and I don’t see why we have to replicate all the other professions”.
Stressing that “we can build our own profession”, Mr Ardino highlighted the positive features of the experience pathway in the context of the great adviser exodus.
“Our profession is very different from others in many ways. We deal in opinions more than facts, I think, not just interpreting laws and often those opinions can be back-tested to see how good or how bad they work, which again, is not as common in other professions. It is really different, and it probably needs to cater to more types of advisers,” he opined.
“So no, I don’t think that’s a big deal and I think if it also means that we keep more advisers, we’re not going to have enough advisers to meet advice demands as it is even if no other adviser leaves, and we get 10 times the number of new advisers coming in.”
Ultimately, Mr Ardino said, a balance needs to be struck between ticking boxes and ensuring more Australians have access to advice.
There are advisers out there that have PHD’s MBA’s & multiple degrees that are unethical & don’t put their clients first. There are also advisers out there without degrees that are ethical & competent and put their clients first. Maybe we should ask the clients which adviser they prefer?
That will do me…….Mr.Ardino doesn’t see why we should replicate other professions, where education standards are the foundation of appropriate ethical and founded (acumen) advice. No wonder these lefties carve out will undue all the hard work of all participants in the last 4-5 years. Incredible…..as we will now remain and industry not a profession.
The band aid was pulled years ago, so Labor does it again…………..
What a complete farce.
All this time and effort and focus and rhetoric about lifting standards and becoming a profession and in the end they’ll water it down because of a whining minority who don’t have enough self-respect to do the work nor enough respect for the profession to place it above their own personal preferences and laziness.
With 24 years experience, I’d tick the box, but I’m a professional, not a box ticker, and I have more pride than to put my own selfish path of least resistance ahead of the public and my peers.
Watering down these rules is akin to changing the name of Coon Cheese. It’s been done for no actual, reasonable or practical purpose, but purely to appease the loudest whiners.
Sad day for our industry when this goes through. And yes, ‘industry’, because professions don’t tolerate this stuff and hold themselves to higher standards. Seems we’re not there yet while some of the people in favour of this are still among us.
Does the FPA possibly have a conflict of interest here.
The FPA are in the business of providing education to advisers (in part, funded by their members, who don’t partake in any of their education products). Why are all FPA mbrs subsidising some members CPD?
Does the FPA have an ulterior motive here?
Why is the FPA providing any education products in a space that it flooded with it from fund managers (higher risk of bias) to the likes of Kaplan (less risk of bias).
Lets assume the FPA education products have some value over the plethora of education already available (probably a big assumption)…..where do we rank it’s bias?
What percentage of FPA’s income comes from fund managers? Will this lead to bias?
How much does the FPA earn from fund managers to give out CPD education credits for sessions held by the same fund managers?
“Beside manner” takes years to develop. The world is full of “educated” derelicts. Financial advice is 80% client communication.
Having left the industry eighteen months ago, after twenty years experience, with excellent audits each year, being a certified financial planner, a Masters from Cambridge (in a non-business or financial related degree), having undertaken specialised SMSF, Estate Planning, Tax, Mediation and Financial analyst courses throughout my career, I took the Fasea exam and passed first time with minimal study.
So yes, all of this does sound a bit conceited of me, (sorry), but I kind of earned it! To have to then sit for seven subjects out of eight for a financial planning degree, whilst trying to run a business full-time, manage four teenagers at home and deal with regulations that seemed kafkaesque, that degree was the thin end of the wedge! If the experience pathway is introduced it at least opens a chink, that combined with more sensible regulations may get me for one to at least consider financial planning again rather than totally dismiss it.
What would be even better to tempt experienced advisers back is some sort of lower level qualification. Most may not need all of the bells and whistles, just the ability to give some holistic financial rather than product advice, connected to areas we have already moved off into.
I agree with Eugene Ardino – I have studied at Masters Level in Psychology and Criminology, taught at two universities and been awarded an Honourary CPA for my work teaching CPAs, consulting for CPA Australia and being a keynote speaker on Strategic Planning at their annual congress over 8 years. I have been the chair of Victoria’s biggest employer super fund and had oversight of the change from Defined Benefits to account based super when Telecom was our largest semi-government super fund. I ran a management consultancy for 12 years and worked with the Industry Commission, managed an Aged Care centre, taught Financial Advisers and consulted to AMP and Armstrong Jones. I have been a Financial Adviser as my chosen active ‘retirement profession’ for the last 20 years and won a number of Awards, including finalist in Adviser of the Year 2023. I have completed Masters of Financial Planning subjects, including Ethics, Commercial and Taxation Law and Economics & Legal Context of Financial Planning. I am an expert in Financial settlements for couples undergoing divorce, property law and employment law. All my clients consider me highly professional. BUT, I do not have a ‘relevant’ financial planning degree. I have completed Dip FS and been invited to become a Fellow of FINSIA. And now the FPA wants to tell me I am not fit, education wise, to be a Financial Adviser?
I think its all in or nothing. This experience pathway will still leave a divide in the industry. I have been in the industry for over 23 years I’ve completed 6 modules in the last 2 years given up time with my family and still ran a business (very successful business) all on the back of the 2026 cut off for education. Our biggest problem in the industry is that we keep shifting the goal posts. Show some commitment and get it done. Step up or get out regardless how good you may think you are.
The comments from the FPA are laughable – “not work in a profession where some practitioners are given a free pathway indefinitely,” the FPA continued. – Do they mean like the CFP’s which were handed out in cornflakes packets and continue to this day ! Dear oh dear. You can fool some of the people some of the time …………
The loss of so many experienced planners in recent years is being looked on as detrimental to the industry. But no, we can’t keep those advisers on if we want to be a profession.
Speaking with a forked tongue?