Noted in a statement from Assistant Treasurer Kelly O’Dwyer, changes to the draft include clarification that the reforms “are not intended to require existing advisers to complete a bachelor’s degree”.
“Existing advisers will be required to reach degree equivalent status, which can be achieved via a number of flexible pathways, including by completing bridging courses approved by the new standards body,” Ms O’Dwyer said.
The new draft also extends the transition time frame from 2019 to 2024.
“We recognise that existing advisers will need to balance any further education requirements with the demands of continuing to provide high-quality financial advice to their clients. Existing advisers therefore need sufficient time to meet the new standards,” Ms O’Dwyer said.
“The education and exam requirements are proposed to commence on 1 January 2019 (revised from 1 July 2017). Existing advisers will have until 1 January 2024 (5 years) to reach degree equivalent status and until 1 January 2021 (2 years) to pass the exam.”
As for the independent, standards-setting body, Ms O’Dwyer said it will initially be a Commonwealth company. The government is also considering allowing the body to recognise adviser experience.
“The government will seek views on whether the standards body should have the power to exempt, on a case-by-case basis, existing advisers from the requirement to pass the exam. This exemption is intended to be reserved for highly experienced advisers with exceptional skills and qualifications,” she said.
“These reforms will raise minimum standards in the financial advice industry and improve public confidence in the sector, whilst acknowledging the skills and expertise of existing advisers.”
Probably off topic too but I’ve been pushing for years and years for shorter, simpler advice documents. I’ll keep pushing until all the “dealer group protection” compliance jargon can be removed and sourced/linked to an external page.
My clients tell me they don’t even read their Record of advice documents.
The limitations of the current attempts to ‘improve’ the quality of advice is best demonstrated by our recent experience to recruit a graduate to our practise. He has 18 months experience in the industry but does not know basic concepts such as super caps,TTR pensions,age pension assessment etc because he has been working in a limited advice environment. We explained that we could assist his career development by learning the advice we prepare for our clients and help service them. He was all keen but ended up taking a job as an adviser in a call centre for a big institution to offer limited advice who were prepared to offer him $10K pa above market salary. Yet another big institution grabbing graduates ( who meet the educational requirements ) to flog product.
Firstly, not sure why most of my last comment was cut off.
Secondly, Gerry I agree completely. Whilst not arguing with others, our external audits are done by a company that assists ASIC with audits and they ask for multiple pages on risk profiling alone.
I don’t see how I could pack everything into a 5 – 10 page SOA although it would be nice… Then again I rarely provide limited advice.
[quote name=”Reality”]Really interesting feedback.
I have never worked anywhere that would entertain the idea of[/quote]
I was quoting Rod Magill from Dover and former AMP aligned dealer groups.
I know there are SOAs of 10 pages or so out there. Bit off track here, but there should be one industry standard SOA template that provides the advice only and the costs, not an extra 40 pages of pleasantries. Every SOA should be lodged within an ASIC portal. Why are some compliance departments happy with 10 page SOAs and others with 50 page SOAs?
I really despair at the standard of some of the comments, not to mention downright cattyness, maybe it’s just how some people converse, or, do not know how to put a point across?
I agree that experience plus knowledge and a whole lot of ethics is what will make this industry great.
We run our own license and have SoA’s around the 7-12 pages dependent on the advice given and yes, they are all compliant.
I do support the call for knowledge (note I didn’t say education), I am one of the advisers who came from National Mutual in the mid 90s “off the street”, as for education, I hold an MBA and currently pursuing my PhD in regulatory compliance and the effects on the financial planning industry. Being almost 60 i relish the change and challenge of what’s ahead.
So gents, lets just try and do what we can to get over the speed humps in front of us.
Really interesting feedback.
I have never worked anywhere that would entertain the idea of
[quote name=”Rod magill”]Reality:
Our dealer group based in Melbourne has 100% compliant SOA’s that are on average 8-10 pages long, it is one of the most stringent dealer groups in relation to compliance I have seen.
[/quote]
That is a big call or you have been with some shonky dealer groups in the past!
I’ve always thought that my half an economics degree is about twice as good as a whole one! Reality makes some good points, but perhaps a little less diplomatically than others may want – tough. I have my own single-adviser AFSL and run it single-handedly, but with a bookkeeper/accountant and a compliance manager, and I manage to do 5-10 page SOAs pretty regularly. Being completely fee-for-service for 25 years helps with compliance issues (invoicing every client every year also helps) and keeping advice simple is another tip. We don’t have to know everything but when we don’t know something we need to say so and refer clients to someone who may know more than we do – just as we accept referrals from others. Despite having lectured to Diploma Course planners for the SIA many years ago I then had to sit the exams and despite having informally studied every year since, at the ripe old age I may yet have to finish that Economics degree – although I suspect one in naturopathy or astrology might be more useful! I’d hope my experience and being the licensee may count for something, but the study will be fun, providing they know what they’re talking about… Anything must be better than K..l.n! Good luck everybody. The future has arrived.
Reality:
Our dealer group based in Melbourne has 100% compliant SOA’s that are on average 8-10 pages long, it is one of the most stringent dealer groups in relation to compliance I have seen.
I met with new clients this week that had an SOA 72 pages long that they had never read and never would read. A client will and does read a short concise and relevant SOA, please call me if you would like the contact number of the dealer group,
regards
Rod m
0414 325 778
Why don’t we skip the degrees and go straight to MBA’s and PHD’s! What a farce! The FPA is the most insipid organisation I know! We are getting ripped off with our membership fees-should be no more than $100pa. Kelly, please do something about this!
@Another Mad Planner – very reasonably put.
Thing is, it is always the minority that ruin it for everyone. If we can get rid of a good part of this minority by increasing standards, fantastic. A purge if you will. Advisers who do not currently have a degree are not going to be worse off after doing one… They should be happy they have been able to operate this long without one (I know I have been).
It is however frustrating when people think that experience simply = quality. Myself, nor the public care for previous experience in a time that the industry was in disarray. I know deep down they know that but still fight tooth and nail to justify their cookie cutter product flogging for just that little bit longer to retirement.
Reality, I get what you are saying but it is how you say that makes the difference in getting your point across.
I sit on both sides of the fence in this argument as I have seen some really experienced and educated planners do some of the worst things (some leading to bannings).
What I don’t want to see is the good planners that don’t have a degree be pushed to the side and labelled as “Cowboys” (Professional Planner headline this morning) just because they don’t have a degree.
I don’t think that someone with a degree working back office for 5 to 8 years is better than the one that has been client facing for 10 years or more.
I agree that we need to move the industry forward and want to see that as well, I just want it completed in an orderly fashion. The previous draft legislation was to harsh and now the new proposed legislation is too soft. Somewhere in between would be fair and just to everyone.
Steve, the worst planners I know are ‘experienced’ with minimal qualifications (judging by your comments on other articles I am guessing you are one of these as you don’t even value the advice you give). Absolutely are some that are great based on experience alone but any further education is only going to help and hopefully weed out some that aren’t serious about being professional.
We want to get away from how this industry operated in the past (I think we can all surely agree it was a circus). This is a step towards that. You don’t need 8 years to do a bridging course, this is just a sellout to let the crooks giving us all a bad name continue to provide horrible advice for another 8 years until retirement. That might suit you fine but I actually care about the future of the industry.
I am not a member of the FPA and I have stated I don’t even have a degree (am most of the way through however as I used that thing between my ears to identify change was coming years ago).
PS: I would also love to see shorter SOAs, I was merely saying to Chris I don’t see how based on the current legislation you could get away with a 5-7 page SOA. Thing is, can’t do that at the moment considering how many ‘advisers’ have no idea.
Reality, YOU are the joke here mate. Your attitude to you fellow planners is nothing short of disgusting. I’m guessing a huge self interest at play here by you.
You carry on like your the measure of a good planner because of your education. Truth is education is far down the list of what clients want and need. You have been sold a sucker punch by the self interest of the FPA. This industry should be focused on just two things.
SOA’s that a normal person can/will read within 10 pages or less & ridding the industry of bad eggs. Your education tact is neither helpful or warranted. This course flogging needs to stop.
At least some sense is being shown in this area. The definition of highly skilled is yet to be determined but it would be sensible to assume that a large number of experienced advisers with various qualifications will be exempt. It is obvious there will be some that don’t cut the grass due to experience or qualifications BUT the necessity for a degree for existing advisers is removed with the offer of bridging courses. GERRY, I want a 9 page SOA please.
[quote name=”Chris”][quote name=”Gerry”]
I don’t suppose you could exempt these same advisers from doing a 50page SOA for a basic new life policy and a basic investment strategy. [/quote]
Our SoAs are 5-7 pages long?[/quote]
You are kidding aren’t you, Chris?
If not, I highly doubt that is a compliant SOA!
[quote name=”Gerry”]
I don’t suppose you could exempt these same advisers from doing a 50page SOA for a basic new life policy and a basic investment strategy. [/quote]
Our SoAs are 5-7 pages long?
I’m going to be 57 when I have to start & 62 to be sufficiently educated in this industry. I have been working in financial services since I turned 17 and have 2 bachelor degrees I spent years at night school to obtain. Yeah don’t think these sums add up for me!
great news and a sensible outcome, all we need now is th LIF to be pushed back to the 1st ofg Jan 2017 to let the e3lection run its course
Hopefully we can expect the same requirement of politicians.
Next stop PhD requirements.
“”This exemption is intended to be reserved for highly experienced advisers with exceptional skills and qualifications,” she said””
I don’t suppose you could exempt these same advisers from doing a 50page SOA for a basic new life policy and a basic investment strategy. Finally getting some recognition for previous effort – but there could be a lot more done to encourage advisers to strive for higher education standards rather than using time deadlines.
Oh good… So we have another 8 years of this industry remaining a joke…
This just allows the bad apples to keep doing what they are doing.