In a submission responding to the draft legislation entitled raising professional standards of financial advisers, outgoing FPA chief executive Mark Rantall said the improvement of educational standards could only be achieved under a transition plan that is “actually workable and practical”.
“The exposure draft needs to be amended to address the proposed requirement for existing financial planners to have to complete a bachelor degree or equivalent by 1 July 2019,” Mr Rantall said in the submission.
“This requirement if not addressed will have very serious implications. It is physically impossible for any individual to be able to complete a bachelor degree within two years (between 1 July 2017 and 30 June 2019), let alone do so working full-time,” he said.
“The consequence of this measure will be a dramatic reduction in financial planner numbers, which will impact tens-of-thousands of clients being left without their financial planner to service them, hundreds of small businesses closing their doors [and result] in large numbers of support staff out of work.”
In the submission, the FPA also said the role of professional bodies in improving professional and educational standards had been overlooked.
“The exposure draft significantly reduces the role of professional bodies. This does not align to the policy objective or the recommendations made by the PJC that had bi-partisan support,” Mr Rantall said.
“Therefore, it must be noted that the FPA will be unable to support and advance the new framework, including the establishment of the standards body, in the absence of our proposed changes.”
Perhaps the education timeline suggested in the draft higher education and professional standards is a clear message from the government that this legislation should be taken seriously and they want to see some serious action.
For example, perhaps an idea to convince the government to extend the ‘impossible’ timeline is for non-degree advisers to start enrolling in degree courses, even if it is only one course per term/semester part-time. This will demonstrate to the government that non-degree advisers are taking the legislation seriously by taking the necessary action to improve their educational standards.
The problem is simply the word ‘bachelor’. Remove that (at least for existing advisers), and the problem is solved. A grad dip or masters degree could be workable, especially with credits for prior study and/or experience.
The issue always has been about ethics, vertical integration and sales channels.
Technically appropriate advice, as opposed to regulatory appropriate(tick that box on the SoA but ignore the advice quality), has NEVER been the main issue of all the recent problems.
It’s like taking vitamins for obesity, the cure has no relation to the cause or symptoms.
Yes there is bad advice, but no more prevalent than in the accounting, law or medical fields. There are skilled practitioners in every field, there will always be some that don’t come up to scratch no matter their qualifications.
If we focused on vertical integration and conflicted sales channels 90% of the work would be complete.
Couple that with a proper professional standards board with the power to revoke and suspend licences, with efficient reporting channels from industry participants and clients, then the other 10% would be covered.
It is very easy, why is no one in any position of authority recognising this?
Probably the vested interests of the big end of town would be my guess. Conflicts abound.
BTW I have a masters of finance so I am not impacted. No conflict here!
Commonsense has finally come to the FPA, overdue but timely for this. The government should look at themselves and see if they could do in 2 years what their asking off this profession?
I don’t think so……..
WOW.
Was that the FPA talking common sense??
Well there’s a first time for everything.
About time someone brought some common sense into this latest nonsense legislation . I have consulted with my legal people about this matter , and the government is going to find itself on the back of a class action if it continues down this track .If the government wants me degree qualified it can pay for my time to undertake the studies that they think might make me a better adviser . No other profession has ever been driven down this track and nor should they . It might be a good idea to sent the parliamentarians back for some study , as they cant balance their books or live within their means .
I’m sorry, but I cant help feeling that the FPA has no credibility in this area.
They have not even been able to differentiate (to the public) between new CFP’s and grandfathered CFP’s.
That would be a really good place to start.
Well said FPA – this is another pending debacle alongside accountant licensing – The reality is the regulator would be better off having practical steps in place for both issues so that they can better monitor the industry with their limited resources. We are heading into an impractical outcome on both fronts which will delight an antagonistic media and further damage the industry image despite the obvious improvements taking place.
“It is physically impossible for any individual to be able to complete a bachelor degree within two years (between 1 July 2017 and 30 June 2019), let alone do so working full-time,”
Why not start now then? Or are they too busy lobbying for the standards to be lowered?
about time we heard some commonsense around these you-beaut feel good announcements from the larger planning groups!
the time line is ridiculous…