Synchron director Don Trapnell has issued a statement calling out the federal government for adopting an approach to financial advice that will result in “over-education” and “over-regulation”.
Citing research conducted by ifa suggesting that as much as 75 per cent of the industry may seek to exit ahead of the introduction of the new standards, Mr Trapnell said this outcome would not be in the public interest and that life insurance specialists will be the largest casualty.
“A mass retirement date for life insurance advisers is looming and that date is 31 December 2023,” Mr Trapnell said.
“We believe the government is trying to force life advisers, who are engaged in helping people to make simple, yet life-changing decisions around protecting themselves and their families, to become full service financial planners.
“The pendulum has swung too far the wrong way.”
Risk advisers do not need to be across retirement strategies, “the intricacies of managed funds” or the “latest superannuation caps legislation”, he said.
He called on the government to take various financial advice specialisations into account when determining standards.
Synchron has previously called for a separate licensing regime for life insurance advisers.
All risk commissions should be banned. If you want to be considered a professional then fee for service is the way to go. There is no valid argument for commissions .Whilst there is an incentive for the reward of commissions there will always be examples of bad behaviour.
Here’s an interesting compromise… You get educated and pass an exam to be able to receive commission… No education and no exam, you cant ride the commission gravy train. While I write insurance lets be honest, most of the risk only advisers that I know focus on that one area because you can get paid the most with the least effort. Also get a nice recurring revenue stream for very little exertion ongoing (and no opt-in!).
Commissions are no longer paid to advisers to secure a product recommendation. That is outlawed under BID. Significantly reduced commissions are still paid for implementation tasks such as answering clients’ questions about policy details, and assisting them through the application and underwriting process. They are paid to advisers to cover the cost of services the insurer would otherwise have to provide themselves if dealing directly with the client. The adviser is usually in the best position to provide these services efficiently, due to their knowledge of both the client and the product. If advisers were not used for this, total costs for consumers would be higher.
Bear in mind that many doctors in private practice receive much of their income from indirect sources such as Medicare, health insurers, and hospitals, rather than directly from patient fees. 100% direct payment of client fees is neither a sufficient nor a necessary requirement for professionalism.
I think a few people are missing the point a little bit. Most of us risk writers aren’t complaining about further education but what is being suggested across the board is like a bricklayer having to do a carpentry, plastering, tiling and other apprenticeships so that he can fully understand how a house is built. The complaint from most of us is that so much of the further education is not relevant to our advice process. Complete ignorance is driving some of these comments and if you think for one minute that just become someone is laden with degrees that good advice will follow, well, time will tell.
I absolutely expected the bricklayer who built my house to have a good idea of how a home was built…
Ok bad choice of words, but he didn’t need to do a carpentry apprenticeship to build your home, right?
To be blunt you guys are nothing more than car salesmans in tan suits. At least that’s what people think of you.
To the old riskies your sole argument in a nutshell is that higher education does not prevent fraudulent behaviour. I would agree, but a $20,000 to $30,000 investment in ones education certainly can make you stop and think, but unfortunately that’s all you’ve got. You want your own license, you want no government intervention and you want no changes…you want and want want and are prepared to do nothing in return. We’ll I’m sorry but that won’t happen by standing still.
I’m thinking perhaps a separate risk license is a good idea so we can regulate the hell out of you guys and bury you in red tape and compliance. Perhaps longer SoA’s, even obtaining a separate legal opinion on your IP recommendation, .longer cooling off periods why not? After all if you have no formal qualifications, no entry requirements perhaps we need this level of consumer protection.
If you’re happy with continued government intervention, with the public and media thinking you’re equivalent to a Used Cars salesman then do nothing. 20 years ago when I entered this cowboy of an industry I was not happy and many others are not happy with that comparison. This contentment to put up with this comparison is a thinking that is no longer welcome in this industry. I’m pretty confident post 2024 it will be the best of times for this industry.
Ok, so you’re in the industry but not an adviser. Clearly bitter. You think after 30 years of hard slog in this industry that $20,000 would make us stop and think? Happy with license, happy with intervention and happy with changes, so long as they are relevant and not driven by bitter people who think we are car salesmen in tan suits. I think you need a career change!
There seems to be lots of differing view here. I believe that Don Trapnell’s point about over education for life-risk advisers is correct. It seems to me that the government is effectively forcing all advisers to become full service financial planners.
The present system has worked for a long time. I don’t see that draconian changes like those proposed will help much. As a life-risk adviser I have a working knowledge of matters related to financial planning. Indeed, our CPD training requires it. However, the only real beneficiaries in enforcing degree qualifications for risk advisers will be the universities and training providers. For them, it will be a bonanza.
Finally, many years ago we risk advisers had to deal with accountants who put a lowly to no-value on life insurance. Now it seems the wheel has turned full circle and we’re seeing financial planners who hold the same view.
To comment on the post about advisers age. I think you’ll find three groups of advisers out there:
1) Young/new advisers who have completed or are completing appropriate study. They say what’s the fuss, get over it we need and want to be part of a profession. I say to them plz appreciate that experience counts and yes should be recognized in some way. Hopefully one day your degree will not be called null and void also, especially when a Masters of Advisory Science is the latest fad.
2) A second group of well experience advisers who have Degrees and like myself went out and did the most appropriate and relevant post graduate study they could find. I joined when advisers were called cowboys and I see the value of being a profession. Unfortunately I am now being punished for trying lift education standards. To myself i say get over it it’s likely you’ll have to study the same course again.
3) the third group are long standing advisers with qualifications equivalent to DFP 1 to 4 completed only to meet their dealer groups basic RG146 entry requirements. To them I say get over it, pay your $8K and do four units of a Grad Dip (after exemptions) or just move out. There is no use trying to convert these guys and change 20 years of belief that the minimum is acceptable. They’ll never understand that people who write law have degrees and see the value in them.
How is any degree going to possibly stop the bad behaviour in the fraudsters we see reported on these pages almost every day?! It WILL NOT. Isn’t the LIF change/higher education calls brought about by these fraudulent advisers? ANSWER: YES. Now, not only will more education NOT stop advisers with flawed personalities, it will NOT help older riskies look after their clients with insurance advising ONE IOTA! So PLEASE all of you who deem it necessary to say you know better about whether an adviser of 35 years or so, with no complaints against him and whom his clients love to death is good enough to continue protecting his precious clients, well, I suggest you look at why you’re saying it. I would hope it is not simply to make yourself feel better that you’ve done lots of study and have lots of letters after your name. If that sort of thing helps you with FULL financial planning with YOUR clients then good luck to you. Old riskies need to know about insurance, super regulations and one or two other associated things. WE DO NOT NEED TO SPEND $40K and untold hours away from clients and family to satisfy the perceived whims of idiot academics who think everybody is entitled to their opinions of what constitutes “qualified”!!!
.
If an old riskie can’t stay across the subject matter that is actually needed to BE a riskie then fine, he should upskill. Myself and the vast majority of old riskies DO stay up to date with the relevant changes. We know EVERYTHING we need to know that affects the advice we give our precious clients. UNI DEGREES will NOT further the quality or amount of service we give to our clients. Why can’t the thickheads who comment otherwise get this? I don’t have any degrees and I can see this with crystal clarity. Jeez I’d love an open floor debate with some of these absolute academic wombats that are spouting this nonsense. Let’s tell the teachers in the schools of Australia that because some of them have shown personality traits that are not the best that they have to go back to school and get more uni degrees, Yes, ridiculous – but that’s what the idiot academics in our industry are saying to us! Think about it!
.
So, all you do-gooders, puritans and bleeding hearts with wonderful uni degrees behind your names, saying all old riskies should get degrees or leave, well, you should think again as you simply know not of what you speak. Separate risk licence and qualification. I’ve been calling for it for a decade. If you won’t heed my calls then at least listen now to the same thing as Don Trapnell screams it too. The damn academics are trying to create a situation where there are NO specialist risk advisers – they want every adviser to be a FULL financial planner and generalist. Imagine if the medical world was plagued with such twisted thinking!
Would be great if all the comments could be categorised based upon age group. Would perhaps give a better picture of what is good for the future of independent advice. The younger advisers I know out there; myself included are pro education and consider it a vital tool in understanding the basics which revolve around quality risk and investment advice such as cash flow analysis and portfolio construction.
It’s sad to see this entire debacle becoming a vicious trinity of the book smarts (& yes…you are vital), street smarts (& yes…you are vital) and blind regulation (& yes…you are vital because human character can be tricky)…each touting their own horn. A sense of balance is non-existent!
Just like a normal business cycle; our industry is moving through a phase. Independent Advisers need to Adapt or their competition will do it!
[b]As a side note[/b]: Of course, the AFA, FPA are self serving entities (& kudos to a comment which highlighted the same-saves me time).
I am a youngish adviser and have completed all education to qualify within fasea’s requirements, and I for one, cannot understand why the older more experienced advisers are worried about doing further study
a lot of the material in the coursework they would know instinctively from all those years of practice experience, and they may need to brush up on a few concepts here and there and i would say the study would be very little for most if not at all
then put all that together into the assignment and exam presto you are done
not that hard, why such angst about sitting -at most – probably 4 papers
i don’t get it
Spot on mate! There is there’s more to this than meets the eye.
Hey presto – I’ve completed a few uni degrees myself but have a few grey hairs
Most of us have too many other things to attend to like our clients and our families.
Time becomes increasingly precious as we get older, and we don’t take kindly to people who ‘steal’ our time for their latest brainwave. A proper assignment actually takes up a fair bit of time, especially when they don’t allow you to use FP software, and require non-templated formats. It can all be done (no doubt), but it requires TIME. (Remember time is precious as we get older).
If I’m going to do extra study, I’d rather choose my own post-grad, rather than do a silly revision.
I’m all for the industry exam, and for minimum tertiary standards. Just that the current proposal for existing advisers stinks. Limited list of courses recognised, and 10-year rule.
There should be a wider range of uni degrees recognised when connected to ADFS (FP degrees did not exist so much pre-2010), and CFP *study* should be recognised too.
In that sense the FPA 100 point plan meets these criteria.
hey man, lets accredit everyone rg 146 good call. it’s all good man what qualification
what you talking
it’s all good man
accredit
Are all these ‘Anon’ people in fear of being identified, brought to account for their views? If you feel so strongly about something, then own up to it! It bewilders me this dogged determination from already over-educated / inexperienced bureaucrats in Government wanting to turn what is an Arithmetic need into a complicated Mathematical overkill of educational requirements. 43 years ago I started in the LIFE INSURANCE industry and 31 years ago I became an INSURANCE AGENT. Life experience counts as much as education. On the flip side, someone entering any new profession for the very first time obviously needs to become adequately qualified to give the appropriate ‘advice’, to compensate for their obvious lack of experience. But to have 31 years of industry knowledge as a 100% risk only ‘adviser’ totally disregarded is incredibly frustrating and disrespectful. To be expected to undertake tertiary level studies and sit exams at 60 years of age is a massive ask. To remain in the industry I have worked in all my adult life and continue to care for my many hundreds of clients has always been and remains my top priority. I am fit & healthy and want to be there for every one of my clients for many years to come. But I don’t need to know about derivatives or the inner workings of SMSF and their rules and regulations. Only what is applicable in deciding whether or not the best ‘advice’ for a given client situation is to pay or not to pay risk insurance premiums from their invested super fund assets. Talk about taking a sledge hammer to a pin…I have known Don Trapnell for decades & we haven’t always seen ‘eye to eye’ on everything. But I am proud to say I have been with Synchron since 2002 & an A.R. since 11/03/2004 – and the one thing I’ll never do is hide my views and opinions behind nom de plumes!
There seems to be a lot of people called “Smith” on this website criticising others for posting anonymously.
Phillip Maxwell Smith born in Melbourne in April 1957. I’ve heard all the ‘Smith’ jokes and your’s is the least funny of them all. Now over to you…who are you Mr Funny Man?
Good one Phil – agree with your comments and your comeback to the snide remarks from Anonymous immediately above.
Yes Phil and Paul . . . see my reply to “non de plumer” below . . . too funny. Well, it would be if our situation wasn’t so sad or dire at this late stage. I say we run the academic legislators out of town – with me? 🙂
Good luck telling ASIC that you “don’t need to know about..their rules and regulations”. So you don’t feel any value in someone doing formal learning about consumer protection mechanisms, cooling off periods, APRA regulation etc etc. It should all be done via “life experience”. Phil apart from some Kaplan and the odd risk seminar do you have any qualifications? Like a Hairdresser for example has to go to TAFE before they can cut hair do you have any? Seems like you’re happy to operate at minimum of legal standards. Good luck with that strategy.
Of course he has qualifications – at least DFP1-4 . . . same this old riskie, ME. And 30 years+ of experience. What’s YOUR qualification in that regard? Hmm? Can’t really see any value in your fully defensive comment. Pull your head in AND put your name on your comment. Phil did. That shows integrity and accountability. That is what the fraudsters causing issues in our industry do not have – integrity and accountability. Get some.
Phil, what about being a mentor to a young advisers and staying on to share your vast knowledge and skills that’s not an option ?
Surely with your 31 years of experience, you can pass 4 exams with flying colors, it will be a walk in the park mate.
No, you missed his point entirely. The guf and over technical blurb they want Phil to assimilate is not needed for him to help his risk clients. Go back and read his comment again and try harder to understand this time. I’ll help . . . no derivatives, no overseas currency echange, no SMSF’s . . . get it? Good! Separate risk license. Separate disciplines. Get it? Good!
Sorry people, I’ve been working hard looking after my clients’ needs so just checking in now. For the record, yes I have my Dip FP and so on. It’s not about NO education for long standing Risk Advisers; it’s about also recognizing their decades of experience that have to equal to something significant. And yes, I have done a bit of mentoring in recent years. I have also referred clients to Synchron newbies to help them get a leg up. Were I to find the education requirements too onerous to continue to be a 100% Risk Only adviser by 1 Jan 2024, I would concentrate on mentoring and referring all my client advice needs out to my fellow [and younger] Synchron advisers. I think I’ll leave it now to everyone else to put forward his or her own views.
The acid test is proficiency, not whether you have a degree or not.
and proficiency is also perceived, and that perception is reality for most (even though those two may be far apart)
that is why we need a higher barrier to entry and a degree requirement so the public and regulators have confidence that an adviser has met – at the least – a minimum standard as compared to other professions
friends, this isn’t about our personal positions, we have to think about the industry as a whole
there is a huge gap between what an industry is and what a [b]profession[/b] is – calling yourself one or an individual or two isn’t sufficient, it has to be the whole of
if we want to stop government intrusion – read compliance – we have to take steps to become self regulated and own our future
otherwise, it will be one reform after another which is neither in our interest or in the public’s
[quote=Anon 2]Brian personally I think it’s advisers like you, plus CBA passing the buck/comments on lifting education reforms as to the reason why the majority of financial planners now have to undergo some type of education requirement. Why didn’t you do some type of minimum training, perhaps even a Certificate IV in Insurance would of helped? You’re like the 1% of poor advisers where the other 99% suffer. You can’t ask for your own risk license and have Zero barriers to entry. However, my apologies for my angst we should not be arguing & blaming each other. Please note I do say sincerely we do need guys like you in the industry, you obviously care and I love your passion here, so I hope you stay around for a long time and show these FASEA bastards up. All the best.[/quote]
For some reason my above comment became stangled with formatting!
.
I said to ‘Anon 2’ : I can’t hear what you’re saying because who you are is shouting too loudly – and who you are is nobody without a name. So we should take your comments as such. Come back with the courage of your convictions when you are less scared to tell us who you are! How dare you lump me in with the damn CBA advisers – you should be ashamed of yourself. You are probably a life company shill. Come back and let me know who you are and we can talk you cowardly creature.
I have a Degree in Financial Planning from RMIT University. I am a risk only adviser. The education I have received from the curriculum is used only 5% in Risk Only Business. The real education I learnt was when I buddied up with veteran Risk only advisers and started knowing the trick of the trade.
Nothing can replace experience!!!!
For Risk Only work, only experience will teach us how to provide the much needed protection package work to the client.
I am ready to stand infront of any committee this government has to offer and can point out the whole curricullium and challenge to show how and where the correlation is between degree education and Risk only work I do???????????????
I disagree, a lot of the application for risk work was probably learnt in your degree and you instinctively apply and attribute that to experience, when in fact it was your degree that gave you the knowledge and judgement to apply
I disagree – you are wrong “Risk Only Adviser With Degree” above is spot on. You are speaking through your hat and justifying your own position as you’ve spent your money on education that you probably needed doing FULL financial planning. We riskies are different and as soon as the stupid people spouting these new rules raise it the sooner we can get back to helping clients without academics distracting us with their fears and half baked solutions.
As a risk adviser with 2 degrees in relevant fields, i learned next to nothing in my degree that assists me on a daily basis. I even did a couple wealth management subjects. Literally nothing……
It is wonderful to see the courageous, tenacious and unstinting leadership on this and related matters from the FPA and AFA. They deserve to be paid more.
OK, I’ll bite . . . you are kidding right?
Before we even react to the need for any Financial Adviser needing additional training we need to ask the very simple question……..Why.
What shortcomings have been detected in the advice given to date and how can this best be addressed.
If we are to spend 6 years being 1% OR 5% more skillful then is the time spent justified.
What % level of improvement will justify spending 6 years in further study.
People who pass subjects demonstrate that they are good at passing courses not that they will necessarily be good in the field applying their knowledge.
Most of us have been taught by degree trained teachers. Some of them were excellent and some of them were much less so.
But my argument is useless as LIF, Tax accreditation, degree training etc is not about logic so much as an unstated agenda.
one argument could be the % of disputes lodged and accepted by FOS against financial advisers as a proportion of the overall number of complaints they receive each year. complaints against advisers is significant and increasing yoy. why ?
everyone loves to use medical analogies, so will l. most doctors devote seven or more years of their lives acquiring the [i]knowledge, judgment and experience[/i] that allows them to be “qualified” to care for patients. in fact, all those years of training teaches them 3 specific skills: make a correct diagnosis, a prognosis, and apply the correct treatment.
financial planners (advisers) do exactly the same thing with peoples finances. our education and training to become qualified should be no less than 7 years (including of course education and experience)
if we are to become a profession – and stop government intrusion – this is absolutely necessary [b]first step[/b].
of the majority of complaints accepted by FOS 24% is for inappropriate advice -[b]STILL[/b] Source: FOS 2017 Annual Report
I’m wondering if we could wind back time and say what if a Diploma in Insurance was offered (and they are now finally available, don’t cost much) would “riskies” and new entrants study it? I’m sure experienced advisers it may not be 100% totally beneficially but with any learning it wouldn’t be a total waste of time/money.
What about if studying this course it lead to the Government not stepping in and over regulating, if it resulted in LIF not happening, we avoided FoFA, if it lead to avoiding this FASEA crap, if it lead to lower compliance, if it lead to getting your own specialized risk licence with the exemptions from the corps law, What about if it lead to the public thinking better of us all.. would you study it ? .I would probably say hell yeah. I can’t appreciate how someone could be in an industry as highly regulated as we are for 20 years and think just doing the minimum will get you by. Personally it’s a very selfish approach. Just my thoughts but I think the Government is going to keep stepping in and further change is on it’s way.
I second that. it is high time we view this as an opportunity to, just as you state above, to forge our own identity, with our own discipline and forge a distinct profession, and become self regulated or co-regulated
If i as a single person can do something towards, – and i am already doing that – to lessen the burdens of my fellow colleagues then i most certainly should, and am obligated to do so
onward and upwards friends, colleagues, i have to get back and hit the books for my next assignment
What you suggest is appeasing a bully. You never do that. Give an inch and govt will see weakness and opportunity and take a mile. Your reasoning is flawed.
Don Trapnell – 10 out of 10 for leadership! Keep it up Don. The industry listens to you and respects you. Personally, I think you’re just about the last hope for we riskies. Good on you! Keep hitting the idiot academics with that inimitable common sense and they won’t know what hit them (as they don’t see it often)! Thank you Don.
Whilst there is certainly a requirement for Risk Advisers to be across changing super legislation Don is correct that there are many areas of Financial Planning that Risk specialists do not need to be qualified in. Risk Insurance is a specialised field and as such whilst it’s important to understand the implications of such things as IT155, IT2434,118-300,118-37 etc, etc, etc, they don’t need to know the full ins and outs of Aged care or Retirement Investment strategies. It’s a bit like a brain surgeon needing to be qualified as a plasterer – whilst it might be handy, it shouldn’t be a requirement to continue to be a brain surgeon. It’s also reasonable to point out that those who chose to be specialist Financial Planners don’t need to be across all aspects of Risk Insurances. Great idea Don that there should be a separate licensing regime for life insurance advisers. There should also be a separate exam – it’s just commonsense. The question is will the bodies purporting to represent life insurance advisers have the commonsense to support this?
looks like risk only advisers didn’t manage their own “risk”
they can still go back to school they have 6 years, it’s not late folks
Going back to school won’t help me ONE IOTA in helping my clients better protect themselves with risk products. That is my JOB – nothing else! Wakey wakes! This makes me so angry, comments like yours. Give up will you and get at least as full of common sense as Don Trapnell. And tell us what you name is while you are at it or your comment means fairy floss! C’mon, OWN UP!
you are angry with the commentator because, he is encouraging, and positive and saying, “its not too late”
or you can go back to school ? going back to school is not meant as a pejorative term
it’s what we are being asked to do by the authority, FASEA, we all have to do that in some form or another, except for those who have a specific financial planning degree completed within the last 10 years and on the approved product list of FASEA
whether you decide to do that – if you wish to continue practicing – or not, is up to you
I think further study would definitely help you though
what about if helping your clients included keeping your job and being the best adviser you could possibly be? Good luck operating at the “minimum” level… personally I thought that was never a good business plan.
Well, thanks for your thoughts “Anonymous” and “Anon 2” – If you actually had the conviction of your words you’d let us all know who you are. If you can’t publish your name your comments mean nothing to thinking people who understand what ‘taking a stand’ means. Come back and comment something meaningful next time when you grow up and want to come out from lurking in the shadows! Then we’ll know you mean it and have some substance about you both.
Brian personally I think it’s advisers like you, plus CBA passing the buck/comments on lifting education reforms as to the reason why the majority of financial planners now have to undergo some type of education requirement. Why didn’t you do some type of minimum training, perhaps even a Certificate IV in Insurance would of helped? You’re like the 1% of poor advisers where the other 99% suffer. You can’t ask for your own risk license and have Zero barriers to entry. However, my apologies for my angst we should not be arguing & blaming each other. Please note I do say sincerely we do need guys like you in the industry, you obviously care and I love your passion here, so I hope you stay around for a long time and show these FASEA bastards up. All the best.
The problem with a risk only focus (and 5 page SOAs) is that the bigger picture is often missed. For example taking a $2k premium each year from super over 30 years results in a reduction in retirement saving of $204,146 due to this money not being invested (assuming 7% return and no top up contributions). This has a material effect on the client which is often overlooked by risk only advice. This is one small reason why we need to improve our advice standards and client education as an industry.
Matt the premiums for insurance need to be paid from somewhere !! …. what if they were paid with their after tax dollars each year instead of them using the money to pay off their mortgage, wouldn’t the compounding interest effect on the mortgage be same over 30 years ?? … I am sure you will find it would be worse off… so lets get off this Super bandwagon and try and show everyone that sells risk they dont know what they are doing.
Client education is important but there is a place for Risk Only advice without the need for Degrees for advisers working in that field.
Ahh yes of course and when should we assume the client die? become disabled ? Insurance is the biggest waste of money ever…that is unless they need to claim.
Matt, you need to speak to a good risk adviser because it’s quite obvious you couldn’t have any Life Insurance because it might impact on your retirement savings or paying off your house. Heaven forbid what would happen if your house burnt down (if you have one) or you write your car off because if your correct you couldn’t possibly have any insurances at all. It’s just a waste of time isn’t it Matt. The next question is how could you possibly have a successful business with such blurred vision. You are correct Matt that we need to improve our advice standards as an industry. Have you considered getting out of the Profession to achieve this goal?
To be clear I 100% agree that Life Insurance is extremely valuable however I take exception to the line in the article that “Risk advisers do not need to be across retirement strategies”. Of course they do and the example I used highlights why. Without further strategy and education many clients will be in a poor financial position come retirement due to the inadequacies of their risk only adviser who sees no value in retirement strategies. Not to mention maximizing the effectiveness of death benefit payments if made via an allocated pension to tax dependants. Unfortunately many clients are dudded because their risk only adviser has their blinkers on and won’t consider these strategies because it’s beyond them.
A specialist Risk Adviser would refer the Financial Planning aspects to a “qualified” person so as to ensure that the client receives the most appropriate advice and to ensure that they (Risk Adviser) does not give advice in areas they are not licenced to give advice in. The plasterer refers to the brain surgeon and the brain surgeon refers to the plasterer. There are specialists in every area of business and our Industry is no exception. How good those specialists are is another issue entirely.
nicely put. and since we are all professionals with various specialties we need to have :
a. high standard of entry into the profession – as a minimum – a specific degree in financial planning, like other professionals are expected to have, for e.g. lawyers and accountants in order to practice
b. a code of ethics and standards for practice, monitored and maintained by an independent party, like the APESB for Accountants (funded jointly by the joint accounting bodies) and enforced by each of the professional bodies
I’m pretty sure that wasn’t Matt’s point, but your emotional response clearly highlights the issue nicely.
Risky’s are in the same FASEA boat as everyone else, so get over it.
Conveniently Matt, you’re not showing the OTHER side in your comments. The side where a full financial planner pays little attention to the protection – the risk side of things. I see it sickeningly too often where the complex financial planner is wrapped up with shares, derivatives, margin loans and God knows what else to justify his fees and sees it as beneath him, trivial or a nuisance to have to flounder around in the risk pot and sully himself with that pesky life insurance. Often it because ethe full financial planner does not fully understand the latest risk products as he’s not that interested in anything outside his financial planning dictate. I exaggerate not! This is why it is crucial we have specific, specialised and RELEVANT qualifications and/or exams for each discipline. Make no mistake, as Don correctly points out they ARE indeed quite different in knowledge and practical skill set. There are many more riskies out there with sublime sales skills that financial planners with sales skills I can confidently tell you that! Life insurance STILL MUST BE SOLD whereas financial plans are sought after and paid for by fees. very different skills in delivering the finished product to the respective clients.
actually [b]a [b]reasonable[/b] financial planner[/b] holding themselves out to be an expert in financial matters should know, or ought to know (that’s what a judge would say), that an investment strategy goes hand in hand with risk mitigation i.e. a complementary suite of risk management strategies to ensure that when the proverbial hits the fan, there are parachutes in place
the operative word being ; a reasonable financial planner – if one thinks risk is beneath their dignity (which is stupid thing to think) then they can always refer that work on to a specialist risk adviser
this is why we need to lift standards broadly, across the whole industry.
and when it does, guess what happens next ? price goes up by approximately 10-24% source: “analysing occupational licensing among the states”, by M. Kleiner and E .Vorotnikov, 2017
5 page SoAs? A full risk advice SoA is longer and more detailed than a full super advice SoA that is largely filled with graphs depicting expected returns etc
Sure, I entered the industry decades ago and essentially did nothing to attain further qualifications for the best part of two decades.. But I don’t see why I should be persecuted by these changes! How could I possibly have foreseen such regulatory upheaval (despite it being hinted at for years..)
Everything old is new again. With some judicious truth in advertising could we not have a world where consumers could more easily differentiate between sales pitches and advice, and have educational requirements to match?.
I know I would have very different expectations of someone called an ‘Insurance Broker’, than I would a Financial Planner or Insurance Adviser.
I too am a dinosaur with little to no qualifications and have been resting on my laurels for the best part of three decades. Industry reform, despite being signaled at for years, has taken me [b]completely[/b] by surprise and I too demand exemption from any and all changes.
I agree with with some of Don’s comments and have been in the industry for over 25 years.
I was made to do a CFP course which was the ‘ants pants’ of qualifications… guess what, no one has ever asked me if I hold any qualifications and dont care about CFP.
I believe there should be different licensing and study/qualifications for advisers providing advice on Risk insurance but it Must also have Superannuation knowledge attached as a lot of insurance premiums are paid within super.
But a degree to advise on other strategies and products financial advisers deal with should not be required…. as I said I did my CFP because I was told I had to, but have had a RIsk only business for 20+ years now so all other degrees and qualifications will be useless and a waste of time !!
I am in my mid fifty’s and after 35 years in the advice industry it seems that the lifetime education of experience with “on the job learning ” ( with regards to Risk Only advice ) can be extinguished at whim by politicians , fasea and the like. I 100% agree with Don that FASEA /Dean Sanders , the Coalition Government , Labor etc , FPA , IFA , FSC, AFA should strongly consider advisers who are 50+ and have more than 15 years experience in Risk Only and take this into consideration before seeing a massive loss of experience within Risk Only Advice Sector . Having a Degree / Masters etc may make you highly educated but it does not give you experience on how to deal with everyday people with honesty , integrity , empathy, compassion and knowledge through years and years of Risk Only Experience. Based on the current standing of education requirements I too will be ceasing advice
Whether we agree or not on this principle Don needs to be congratulated on being one and the only dealer group heads to write & call out the deficiencies and weaknesses of FASEA. We have not even heard a single critique of FASEA from the FPA. By raising this point at least some balance and common sense might eventually be applied.
I’d argue managed funds are relatively simpler than the various differing and complex definitions and conditions within different insurance contracts…
There is no argument, risk advice is far more complicated than advising on managed funds and the like.
and with Synchron so heavily focused on risk, the opportunity to sell at a high multiple will also take a hit.
There are good and bad reasons to agree with Don. Insurance on its own still has tax consequences, within super has tax and other issues- answer- there must be some education to be competent – the actual level of education yet to be decided. But guess what Don- the industry funds will also be in the fight for restricted education with their scaled advice. I wonder how many of their people will also pass that mandated [b]test[/b] for all and have the education to advise. Those in the industry arena should also be very afraid or have they been told they are a protected species.
Industry Funds & their Scaled Advice along with “General Advice” will likely get an exemption
The Union Super Funds would under current ASIC leadership and definitely will if Labor win the next election. Everyone knows that Shorten has a hatred for financial planners/advisers/risk insurers and wants Union Super to be the only game in town.
It is time for the Industry as a whole to stand up for what you all believe, and stop the lets call it bickering, the additional degree criteria that is looming, is a waste of everyone’s time, ASIC or any Government body should not have the right to force these changes and put so may self employed hard working people out of business!! We are sadly being forced to undertake additional education due to the poor ethics of a few, 99.99% of Advisers do the right thing by their clients, The majority should not have to pay the price for but a few. We would be better off if all organizations did a lot more robust reference checking and weeded out the few bad apples. p.s. Please have the intestinal fortitude to put your name on your comments 🙂
Rod, to some extent I agree with what you say, but you are #1 preaching to the converted on here and #2 pushing shit up hill to make any changes in relation to additional educational requirements. There is no political will from the LNP to expend more political capital on this after previous efforts with FOFA. The make-up of the Senate wont allow any watering down of the current legislation and there will be no assistance or quarter given by Labor who hate our industry. So this is our lot, live with it or get out in 2024. Existing advisers wont have to do a full bachelor degree, but they will have to do something. It may not be fair, but then life isnt fair in lots of cases. The requirements for existing advisers isnt yet known, so plenty of people are shouting in the dark at this stage. This will be sorted out in a the next few months. After that we will all have 5YRS+ to do whatever is needed. So you have 2 choices. You can spend a shit load of time wailing and fighting against change or u can redirect that time and energy into your study. What will u do?
As usual, there is biased and misinformed generalised comments deflecting from the real issue. Don is pointing out that in most cases risk advisers who just do risk are very good at it and deal with people whose premiums are not big enough to generate sufficient fee to pay for comprehensive advice. These premiums are generally no more than a few thousand per annum and well under and super cap. Principally the issue with risk insurance inside of super is how much SGC is actually being paid in to cover the costs of the premium and is the cover any good. Industry super funds and associated group schemes are often not appropriate for young families and large mortgages.
The dedicated risk adviser is the party who usually services this segment but will fall by the wayside over the next five years. In a decade or more the cost of the mismanaged risk advice pool will start to show through with inadequate cover and stories of what people thought they were covered for only to find out they were not. The new Ombudsman will have a whole new raft of issues to deal with.
The problem these days is you can’t ‘just do risk’ without factoring into account contribution caps, erosion of super balances, estate planning considerations, tax consequences of claim payments via super, etc, etc. As a profession we need to consider all areas of a clients financial position in order to provide strategic advice. Otherwise you’re quite simply failing your clients best interests.
No one is suggesting that one shouldn’t be across the topics you mentioned, that has always been the case and is what most riskys have a sound knowledge of. How does a detailed understanding of managed funds benefit the client when providing risk advice?
Interesting how many don’t know the difference between Super Guarantee(SG) and Super Guarantee Charge(SGC). Only employers who fail to properly pay the SG have to pay the SGC. Maybe some people do need to go back to Super 101?
In an era when most life insurance is funded via super it is more important than ever that risk advisers are aware of the full consequences of this. Unfortunately a lot aren’t. Get your head out of the sand Don and get back to school.
Rubbish, MOST life insurance is NOT funded by super. Get YOUR head out of the sand.
Sorry Don but risk advisers should be across broader advice issues as most are intertwined to some degree.
But most definitely FASEA has gone way too far.
But I’m sure ODwyer will be happy to see the end of Risk Advisers so her Bank/Insurance/FSC buddies can then have no competition to Flog more Dodgy Direct Life Insurance.
Good. More holistic financial advice can be provided rather than just buy this insurance policy. The client would be better off seeing an adviser who can help with that and much more. Bring on the education requirments I say.
I am yet to meet a planner who is an expert in both risk and super. The subject matter is simply far too complex for one to be an expert in both, if you think otherwise then you are likely providing advice that is less than top-notch.
Would you consult a GP regarding your heart disease or would you rather speak to someone who is a specialist that liaises with your GP and other specialists in determining the best options for you? GP’s have their place, no doubt about this. However, the notion that advice standards would improve by ‘holistic’ planners becoming more prevalent is delusional to say the least.
Guess what that specialist did before specialising… They got qualified with a general medical degree. Drawing a long bow to try to compare the entry requirements to be a medical specialist to those who are sitting on a DFP only haha.
Yea But I bet they aren’t being told they need to go back to school again are they??? Or is that drawing a long bow too?
Nor are any financial planners with a financial planning degree. The 10 year talk has been blown out of proportion.
Those with another degree will need to do a bridging course which will be a cakewalk and its pretty likely that CFP will count as that bridging course meaning they may not need to study either.
If you’re already qualified you’re gonna be fine.
A general medical degree doesnt qualify you to be a GP…. A GP handles more simple, every day scenarios and is a specialisation in its own right. Holistic advisers fill this niche, simple advice for simple needs.
No one is comparing entry requirements? you are cherry picking words to fit your narrative.
The analogy rings true in any profession. You can go to a handyman who dabbles in everything or you can go to someone who specialises in the specific thing you need done. You can go to a general commercial lawyer for advice on a tax dispute or you can go to a specialised taxation lawyer.
The tone of your comment suggests you are a holistic adviser. Holistic advisers serve a distinct purpose. However, if you consider yourself an expert in both risk and super, experience tells me you are deluded.
I’m also a strong opponent to “over-education” and just education in general, really. I dropped out of school in year 6 just to be sure I’d avoid being “over-educated.” Everyone laughed at me, but guess who’s laughing now!! **[i]note: it’s still the same people, but I know in my heart i’m the real winner[/i]..**
The unintended consequences of Dean Sander’s FASEA education standards have not been considered. Its too late after the “wreckers ball” has swung to try to rebuild what has been demolished. Consultation- something we haven’t seen much of is the way forward.
True. But the unintended consequences of FASEA are the bits requiring degree qualified advisers to go back to uni. That was never the point of the legislation.
Forcing out minimally educated life insurance salespeople was always very much intended.
I will be ceasing advice on that date after 30 plus years in the advice industry
Get your head out of the sand – of course risk advisers need to be across superannuation cap legislation. Risk advisers can recommend insurance policies in super – premiums are paid by the way of super contributions. Those contributions may breach caps.
Correct, not to mention the erosion of superannuation benefits, different taxation consequences on TPD claims being paid within super, estate planning structures for any windfalls from a risk policy etc.
Medical specialists need to do a generic medicine degree before specialising… This should be no different or we arent a profession… May as well be car salesman.
You think Risk Advisers don’t already know about the points you raise above????
You’re absolutely out of touch with what WE DO, if you think that!!!
I’ve seen plenty that dont know or consider the points above. I write risk, its really important… However there are plenty of things that need to be considered for EVERY client.
Guess you guys have never heard of a referral to a Planner for their Super Advice. They can work in tandem you know.
Bah humbug! The average life insurance policy for everything clients actually purchase these days is $2,800. I hardly see that as a major issue. Its all the other strategies accountants and FP’s put together that really threaten Super Contribution caps. Keep it simple – it ain’t the insurance that’s the problem!