Speaking exclusively to ifa in his personal capacity, William Johns, a certified financial planner specialising in advising clients with complex health and disability challenges and seasonal academic lecturer at Western Sydney University, has raised the issue of potential conflicts on the board of FASEA.
“It is clear there are either direct or perceived conflicts of at least four of the nine appointments, and this is serious,” Mr Johns said. “There is no hiding the conflict is real.”
Given that FASEA will have responsibility for approving specific degrees and educational qualifications for financial advisers, a number of current board members have problematic personal and professional ties to education providers, Mr Johns suggested.
The board members named as having potentially conflicted relationships with education providers are Carolyn Bond, who is an adjunct professor at Deakin University, Professor Mark Brimble of Griffith University, former RMIT chief operating officer and prominent education executive Steve Somogyi, and Michael O’Neill, who sits on the advisory board of Monash Business School.
Mr Johns suggested that esteemed ethicist and FASEA board member Simon Longstaff may be helpful in offering some analysis on whether his fellow board members may face conflicts of interest and how they may mitigate these.
Through these potential conflicts, and its role in determining which courses will be approved under the regime, FASEA is “seriously undermining confidence in the Australian education system”, the adviser and lecturer said.
He added that it might not be appropriate for the Minister for Revenue and Financial Services to have an opinion on education courses that have already been approved by the Department of Education and Training.
“I am not a constitutional lawyer, but I intend to invite legal experts to shed light on whether the minister has authority to operatively dilute the strength of previously-issued Australian qualifications without first proving they are inadequate to serve the public interest,” he said.
Mr Johns said he is interested in hearing from other advisers and community stakeholders who are concerned about the role of FASEA and potential conflicts of interest plaguing its board members.
Clarification: A previous version of this article inferred that Simon Longstaff held a “faculty position” with Ducere Global Business School. While Ducere does describe Dr Longstaff as a member of its “faculty” on its website, ifa can confirm that he does not have any monetary or ongoing relationship with the education provider.
ifa readers are invited to contact Mr Johns about this matter via the ifa editorial team at editor@ifa.com.au
I am curious as to how the new FASEA requirements might interact with BOLR agreements. Can the big institutions use the new requirements as a means to reduce their projected BOLR liabilities?
Btw, I am a non-institutional adviser and have no BOLR arrangements.
If you have previously completed a relevant degree such as finance or economic then that should be enough for existing advisers. What a load of crap this is. Only new advisers should be made to complete a specific financial planning degree. FASEA go back to the drawing board you fools!
Accountants with limited licences, you also are not good enough under the new regime.
there are many – vast numbers i believe- accountants who do not have any degree and have been grandfathered so they will be hugely affected my guess is only 10% of current advisers will remain after 2024
Good, from what I have seen most arent capable to provide good financial advice.
You need to get out more
What a bonanza FASEA will create for Educational Institutions. Even all those employees in Industry Funds including David Whitely and the Hon Peter Colins will have to get Degrees!
OR WILL THEY ALL BE EXEMPT??????????????????? I’ll bet they WILL!!!!!!!!!!!!!!!
wait, you have a masters of financial planning and its not enough? why not?
Only very recent courses approved by FPEC are acceptable according to FASEA. So those of us who have tried to raise the standards of our profession and sacrificed time with family (not to mention paid tens of thousands of dollars) are going to be fleeced by education providers for ZERO benefit to consumers. It is a complete farce.
I certainly hope you’re going to write a letter to your local MP Ben. I certainly intend to as I am in your shoes and I probably taught you and I don’t even meet their criteria. I can just see the FAESA board now…””mmm how do I get my fiscally challenged University back in the black again and also reduce Government funding (who knows even sell a few of my compulsory set text book). I know I’ll make Ben go out and re enroll again because his 2019 degree is now so so irrelevant in todays world of 2020. problem solved” If it’s any consolation some Universities are so broke now they tend not to fail students the first time but give them another shot at the exam. You don’t fail a student and risk them pulling out until they’ve failed twice.
because of two reasons 1) Universities only make money by having new enrolments. If you’re working at Griffith University and you’re told your job is being cut because enrolment numbers are low and you’re sitting on a FAESA board you just say hang on.. I’ll just make all these planners go out and enroll in my course and buy my book. Win Win.. Does that answer the question? also 2) AQF were only thought of a few years ago so most students with degrees won’t be at AQF level 8.
Clients are likely to get best outcomes from an adviser who has done a high quality degree in any discipline from a reputable institution, where they have mastered the skills of researching, analysing and applying knowledge. This allows them to seek the best solutions for every unique client situation, from a constantly changing world of markets, products and regulation. Yet FASEA has deemed such training worthless.
The FASEA preferred approach of studying a narrow range of point in time knowledge at a certificate factory, provides the recipient with a lot of specific information that will quickly date, and minimal skills to apply or adapt it to variable and changing circumstances.
This is like LIF all over again. Good for the profitability of those making the rules. Bad for consumers.
Will FASEA guarantee that required studies to be undertaken by existing long qualified advisers with years of successful experience will be of benefit to the advisers and to their clients? Or will the studies simply be repetitions of past studies and on-job training with no new substantial content? What a potential waste of advisers’ time and what a potential windfall for the EDUCATION INDUSTRY!
Re conflicted members of FASEA; it stands out like any proverbial description that there will be the possibility that some institutions represented by Members of FASEA may have a tremendous say in curricula due to qualifications and experience of existing staff. This may or may not be appropriate. The obvious outcome is that existing courses at Deakin, etc. will become the model for the new requirements.
An existing adviser will learn very little of a substantive nature in the core subjects needed to meet FASEA requirements. University subjects are written to meet some legislative or industry requirement. i.e Develop an understanding of the superannuation environment in Australia blah blah. In short this means you’ll be reading about the co-contribution and super 101. Subjects are also written with the intention of being sold usually offshore and or as an elective of another program as well. This is a case of handing over $2K per subject, and then ticking the box demonstrating that you have a basic understanding of super, compliance etc etc.
There is just nobody sitting around advisers who are not corrupt and conflicted. We have seen it with the FSC, Kelly O’Dwyer, the FPA, AFA and even ASIC and now FASEA.
Every adviser must submit a submission to the Royal Commission requesting an investigation into the corruption and conflicts of interest with these groups.
I declare Kelly Odwyers past Law degree completely invalid for her job.
I demand all politicians need a new degree in common sense and most importantly ethics before they are allowed to pass judgement on others and run this profession into the ground.
most politicians don’t need a degree, they need brain surgery to transplant an iguana’s brain to into their heads.
Wrong. What should happen is a committee should be set up to assess whether Kelly O’Dwyer’s past law degree is valid for her job. The committee should then decide it is not and force her to do another through an organisation that members of the committee will financially benefit from.
Oh wait this is actually happening with FASEA !!
so no brain transplant for pollies. I so sad!
I wish there was someone who could unite advisers to fight back against this crap. Fight all the dodgy politicians, academics, FPA, AFA,FSC and all the other blatantly conflicted idiots.
Let’s unite, this is a debacle.
Surely DFP 1-4 was a joke to qualify.
But to Nowra go so far in the other direction and not recognise past financial based finance / Economic degrees is so absurd it stinks of massive conflicts of interest.
Peter Corrie tried but no support and too much opposition by the powers. we need someone like Jeremy Wright so I nominate him. Who’s with me?! He’s one in a million and could pull of big change.
This is an absolute joke. Us advisers need to start a class action against FASEA. This is peoples lively hood. You cant take people out of the industry by making it difficult for them by making them do further study. I believe its the experience in the field that makes the adviser better. I understand its important to have the right qualification but the current proposal by FASEA is way over the top.
Well said Dennis and especially over the top for simple risk advisers with decades of experience.
I told you so. I said previously that the outcome would be a requirement to do a Graduate Diploma in Financial Planning for all. Just how would I have known that? FAESA is a complete fail and a complete mess with ZERO industry consultation being made.
Universities are under immense financial pressures with many running at losses and many academics facing job losses. If you’re in academia being told your teaching hours are being cut or you’re role is uncertain, we were only going to get a certain outcome with FASEA. If your job is dependent on the exchange rate and the corresponding intake of students from China, India, Philippines etc there is a huge potential conflict here. In this fiscal setting will the 1998 Masters in Commerce or 2001 Masters in FP be still acceptable or should we make new and existing advisers all go out and study new courses like a Grad Dip or Bachelor of Financial Planning? The outcome is certain.
My next prediction is that with the ruling out of degrees like Business, Commerce we are now grooming an age of financial planners that will be unable to read a company balance sheet, no appreciation of contract law and basic tax and insurance principles etc etc, but will be masters of compliance with the perfect SoA being able to be produced from a compliance perspective.
While I agree with just about everything you have said, the Grad Dip does cover things like reading a company balance sheet, contract law and obviously tax and insurance. Certainly a lot more than the existing DFP/ADFP did.
However finance/economics degrees not being considered is a joke for existing advisers.
The FPA has a lot to answer for in regard to education requirements. To save face they need to ensure that current qualifications at degree level such as accounting with the Advanced DFP and CFP are acceptable with a minimum of conversion. it has been good enough till now- what changed- ?? your degree is more than 10 years old–what about all the CPD to stay up to date. if only a ??? new ??? degree is acceptable- there is going to be a very serious shortage of financial advice. Wonder how the industry funds will get around this one OR do we only provide scaled advice. Academics always live in a dream world, get serious fasea or soon to be f/u,or you will cause the biggest problem since storm. As for the FPA, a legal backlash is on the cards for negligence-aka- bad advice to members. Start earning our membership fees.
I think you’ll find that the FPA has lobbied for a sensible “100 point” system which gives due credit to prior degrees and CPD.
The problem is that the FPA has also been vigorously arguing for 20 years, that a large number of planners with no education beyond AQF5 (sub degree) level should be able to promote themselves as a CFP, purely because they “got in early”. Consequently the FPA has zero credibility on anything to do with education standards.
Grandfathered CFPs have devalued the CFP designation, and destroyed the FPA’s credibility. The FPA needs to act right now to rescind all grandfathered CFPs. Only then is FASEA, or any other regulator or politician, likely to take them seriously. The FPA can’t keep sweeping this issue under the carpet.
I don’t believe it but I’m starting to come around to your side. There is a vast amount of CFP advisers whose only qualifications are the CFP logo itself. It is these advisers with decades of experience who did no further study and yet other well qualified advisers are now being punished. Why should an adviser with an old Masters Degree in Financial Planning who wanted Fin planning to be a profession and reduce the potential for Gov’t over regulation, now be the target of reform when we’ve got advisers out there with no qualifications happily saying by 2024 I’ll just retire.
I agree entirely
If my degree was approved previously and may now not be then I believe that this is not correct
The dept of education approved the course many years ago and this should be acceptable to fasea
Time for the wheel to not be reinvented
Time
Mr Johns is full of crap. If there were no tertiary education providers on the FASEA board, he would’ve been getting his name published about that instead and decrying the lack of consultation with academia. The board has a good make-up of people with experience in a wide range of disciplines and experience. Those people who are talking about having board stacked full of advisers with practical, ‘coal face’ experience are simply talking out of their butts. There is no way that would ever happen.
While initially hoping that I’d be fine with a business degree, DFP & SMSF accreditations, it appears that i’ll also have to do some further study to comply with the proposed requirements. That’s just the ticket to the game, as they say. Do it or get out, simples.
Jimmy, the problem with academia is that it does not address practical application. Gates and Jobs were both drop outs.
yes, and so is Zuckerberg. Gates and Zukerberg are also drop outs from Harvard, that is 3 out of 7 billion people. the three mentioned are also geniuses. most of us would not get admitted to harvard, we are only being required to get a grad dip fp which many other commentators have suggested comes from, “third rate institutions” and not good enough for most people with degrees from “prestigious institutions” to add to
so it should be an easy addition then, given they are issued easily. why not get one and be done with it.
they aren’t going to change the rules and degree requirement
It most certainly does! When was the last time you did some academic study in this field? Like Jimmy says, “it’s a ticket to the game” these days. We have all had to adjust to industry changes such as FoFA, et al. Continuous learning and subsequent higher qualifications is the next adjustment we have to make if we are to ensure FP is regarded as a profession.
and what’s the next adjustment? A Masters in Aged Care to offer aged care advice? Why not? I think all you advisers out there giving aged care advice without a Phd in age care are just plain scum and hopefully the law will change. Snapper and Jimmy many advisers already have invested in their education, have degrees and post graduate degrees and already have a ticket to the game. Look forward to you and Jimmy buying a $10,000 ticket (the cost of a Grad Diploma) at the ticket booth and after queuing and investing time the entrance staff now saying it’s out of date. Why are we punishing BEN (see his comments) and the guy with no Degrees just says “I’ll retire now..I’m 80 anyway”.
that is already happening. advisers who want to be a specialist in a particular field are already doing so and acquiring, in addition, to their first degree, multiple other degrees.
that is the way of the world. we will be constantly studying and working and having to balance out work and life
in the future, most financial advisers will have multiple advanced degrees after they get their first degree in financial planning
we will be a profession only then, i for one look forward to the hard work and sacrifice and urge my professional colleagues to embrace the new challenge which is also an opportunity
as the saying goes, “opportunity is missed by most people because it is dressed in overalls and looks like work ” T.Edison
and so the solution is to make those very same highly educated advisers you speak of go out and study Introduction to Superannuation 101 just so that they can meet FASEA requirements?
You’re wrong in an important regard . . . where is the specialist ‘risk adviser’ licence. A travesty the life companies have not championed this cause, given they harp on and on and on about how they are “passionately committed” to the adviser distribution channel. Don’t they just love to trumpet that corporate dribble-speak to anyone who”ll listen. “Passionately committed” . . . I’ll be ill if I hear another life company exec or employee say that again. None of them are.
I think you’re missing the point – its about what education is relevant in terms of the future of financial advice ie equipping advisers to better do their jobs. Surely this debate should be centered around what education is more likely to result in improved outcomes for clients. I’m simply not hearing that discussion and I think that’s abysmal. If Mr Johns can raise questions of FASEA and hold their decision making to account I think that’s a positive.
Hi Anonymous. FASEA was formed under a legal instrument. Once law passes, we cannot challenge it unless via legal avenues. It is the job of the Parliament to debate particular legislation. Unfortunately the parliament has passed FASEA and given it (via its board) very broad powers to do as they please with our education and other aspects of the financial services industry.
One of those powers is they can listen to what we have to say, but can also choose to completely ignore it.
It is because of this broad power that any appointments must be free from conflict, so we can have confidence there will be no abuse of power.
Wrong Jimmy. FASEA have grossly exceeded their mandate here. They were supposed to bring all advisers up to a degree (or equivalent) standard. Instead they are requiring almost every financial planner in the country to go back to school and complete new courses, which will cost thousands of dollara and take them away from their families and businesses. I have a Master’s Degree in Financial Planning for gods sake and I don’t meet the criteria in the draft guidelines. For what purpose are they sending me back to study if not to line the pockets of the tertiary institutions and provide themselves, their employers and/or their friends with more work?
well said.
You missed out the bit that it’s a ‘relevant’ degree standard. How far afield would you have liked them to cast the net as to what was a ‘relevant’ degree? As i said in my post, I would’ve hoped that it wouldve included the study I’ve already done but it doesnt appear to be the case. Will I whinge about it or will I just get on with the job? Will I do the education required or just spit the dummy & leave the industry?
The comment about FASEA exceeding their mandate is just rubbish. For most advisers, including those who already have a degree in a related discipline – finance, business, accounting, economics, law – and/or with 5+ yrs experience, they can complete a Graduate Diploma of FP which has lesser requirements in terms of time and money commitments. It sits at AQF8 in the rung, so slightly above a degree in the scheme of things, but easier than starting from scratch with a full degree.
I’m not sure why you dont meet the guidelines Ben, but unfortunately it’s impossible for FASEA to consider every possible individual situation.
It is absolutely FASEA’s job to consider every scenario and if you read their document, you will find they have done that. The problem is that the solution for every situation, except a very small minority who have completed a very recent, FPEC approved course, is….surprise surprise….complete more study. It is very sad that these academics, who were given such great power, gave in to their own self-interest so quickly. What were they thinking when they stacked the board full of conflicted, education workers who will directly benefit from forcing financial planners to duplicate their qualifications?
Ben has got a Masters of Financial Planning and yet like me and list of qualifications after my name won’t meet the requirements. In his case it’s very likely just too old a degree written prior to AQF standards boards being introduced. Yes he’ll get a few exemptions, (providing his subjects are less than 10 years of age when he tries to get exemptions) but he’d likely have to enroll again in Super 101, and the like, to demonstrate he meets the super and the necessary components.
Wrong again. FASEA have failed badly. They have consulted nobody apart from themselves in this rubbish outcome.
And next in line…. the FPA, with regards to the CFP course. How many advisers would have done this course, if they knew it would not meet the ‘new’ standard? All these assurance that it is AQF Level 8 have come to nought.
The FPA should be compensating all those advisers it duped into doing their academically worthless CFP course. Obviously they don’t have the cash to provide refunds, but they should provide a 10 year membership fee waiver instead.
Yes, this might mean reduced revenue moving forward, so get rid of all the resources ploughed into “lobbying” and “whitepapers”. No one with power or influence takes any notice of what the FPA thinks, so this is just wasted money anyway.
And if they are in the mood to compensate they can reimburse me for the outlay of employing someone to run my business whilst I study superannuation 101 AGAIN and what’s the latest noise a psychology subject! Oh goody I can become a professional student again at 50. Just what I always wanted. What a joke this industry has become
I couldn’t agree more Michelle and you’ve just encapsulated the reason that I, a risky of 3+ decades protecting my clients, will retire within the next few years. It pains me to write these words every time I comment in these forums but many other advisers are in the boat with me and these conflicted, self interested ‘bodies’ around the place need to hear/read someone say this as much as possible. They are getting away with murdering our industry and giving f*** all care to ‘client best interest’. Of course, it is we advisers though that must be whipped into shape and ‘adopt’ client best interest (as if we haven’t for decades now!) Sickens me to the core. Hypocrites all.