There has been a lot of consternation about the government’s announcement of a new class of financial advisers – known, for the moment at least, as “qualified advisers” – but according to Bryan Ashenden, head of financial literacy and advocacy at BT, there is an opportunity for these limited advisers to eventually replace the growing number of advisers that have left the profession.
Speaking at the SMSF Association national conference in Brisbane last week, Mr Ashenden said that while the term “qualified adviser” rightly caused a number of issues, there is still a need to understand what level of qualifications they will need to meet.
“The person that’s working in a superannuation fund call centre that’s providing the intrafund advice, what sort of education should they have? Some of the debate at the moment is looking at should they have essentially what would have been our old, advanced diploma level education?” Mr Ashenden said.
“Do they need to have the full advanced diploma? Is it OK to have only completed subjects in those areas for which they will be allowed to provide advice?
“Clearly, I think there’s an intent to say it’s not going to be the full degree requirements that a relevant provider of financial adviser today has to complete, it will be something lower, something less than that.”
Wherever the government ends up setting the education requirements, Mr Ashenden said it is important that they are a “stepping stone” to meeting the full education requirements of a relevant provider.
“From a financial advice perspective, if we know that is what it is going to be, it is important that whatever that requirement becomes, it is actually something that can work as a stepping stone for that particular individual that if they want to progress in their career or become a fully-fledged financial adviser, a relevant provider down the track, that they get some form of credit for having done that education,” he said.
Where this could be of even more benefit for the financial advice sector, Mr Ashenden said, is that there is nothing in the government’s announcement that would prohibit an advice firm employing these “qualified advisers”.
“Most people are probably thinking about it in terms of somebody who would be the intrafund advice provider within an industry fund, as an example. But the announcement actually doesn’t qualify and say that’s what it’s about. It’s just about let’s introduce this new class of provider,” he explained.
“One of those questions might be is this someone that you can have within your office? Is that an opportunity that it will provide?
“Now again, we need to wait for final legislation to see how broad or narrow the scope of this is, but the current announcement doesn’t actually limit it one way or the other.”
If it does eventuate that other members of an adviser’s office could pick up certain tasks, Mr Ashenden said that could free up some more of the adviser’s time to actually speak with other clients on the more comprehensive advice scenarios.
“The way that this has been phrased as working is that the responsibilities actually all sit at the licensee level. So there will be questions about how this type of advice gets reviewed. What are the compliance requirements around it? All of those things will still need to be dealt to because it is still a form of personal advice,” he said.
“It will still need some form of advice documentation to go with the new advice record that they’re talking about. So, there’s still a number of other requirements that come into play. But again, there’s some potential benefits that could come out for you in terms of running a business.”
Bryan, it is hard to get into a GP clinic in Australia, but I have a solution.
The Government should create a new class of doctor. Let’s call them qualified doctors. These qualified doctors would be employed by the drug companies and would need to be trained in their drugs. They wouldn’t be able to provide health advice beyond their own employers drugs.
These qualified doctors would be free to write scripts for their employers drugs. Can’t sleep, that’s ok go to a qualified adviser that can prescribe sleeping tablets. Need to lose weight, that’s ok, go to a qualified adviser that can prescribe weight loss pills.
The non relevant provider is far better starting their career under the guidance of an experienced relevant provider.
Yay, a return to unqualified sales people, with a week or 2 training and a diploma which is impossible to fail, pressure selling and getting paid bonuses based on sales results (not commissions) in vertically intergrated multinationally owned corporations with no oversight from ASIC, whilst university Qualified Financial Advisers get the blame for everything, pay the costs and have a massive compliance burden and $30k pa professional Indemnity insurance premiums. What is the bet that these sales people also get out of paying the ASIC levy?
sadly you are most likely to be correct…
Not only will they not have to pay the ASIC levy, but when they F up, it will be the adviser funded CSLR that will provide the compensation.
What a load of BS. The horse has bolted. Advanced Dip via the old FPA, told not good enough to be an advisor, have to do another 6 units. If I had do to another 6 units, I would rather do law and become a politician just like all the one that tell else what to do and think they are above everyone else because they are a politician that is a lawyer also.
What about the condition that these clients should not pay a fee or commission for this advice? How does the practice get paid in order to be able to fund the salary of this new “qualified or not so qualified” adviser?
The answser to this article could lie in the followeing sentance…
“…Bryan Ashenden, head of financial literacy and advocacy at BT”
Product provider allocates an in-house amount to runn the direct business….problem solved?
QAR was only ever about Flogging Product via Banks, Life CO’s & Industry Super via Uneducated, Unqualified BackPacker Vertically Owned, Single Product Sales. All paid for via HIDDEN COMMISSIONS.
It cannot be a bigger 1080 degree about face.
It’s disgusting.
It’s RC 2.0.
And the worst part will be they will almost be able to Advise on Everything and with 10% of the BS Red Tape, cost and Compliance Real Adviser’s and Real Advice will require.
REAL ADVISERS SCREWED YET AGAIN.
PS – Let’s remember that Brian works for PRODUCT PRODUCERS, so pretty obvious his support.
And vested interests abound…one can only imagine what will happen once this “gets through”.
But it will be followed by RC 2.0 sometime after.
After Govt. has added more layers of red tape to honestg hardworking advisers, removed even more obstacles for union controlled industry funds (watch for these unions dictating to employers exactly how they will be required to invest)… and we’re down a significant number of advisers; mainly those young enough to start new careers. GOVT WILL NEVER LEARN…THRY’RE TOO INVESTED IN THEIR OWN JOBS!
In fairness, the backpackers are being treated poorly by some fruit growers – let them give some advice to super members
Compare the pair?
Only in Australia do we have such different treatment of people depending on who they are?
In Financial Service
Fully Qualified Financial Planners are heavily regulated when delivering product advice – and have been made to complete Ethics training due to their conflicts?
Unqualified people however it appears can call themselves provide product advice and are not conflicted it seems because they are employed by a product provider?
In what world does that make sense?
“S/He who controls the money, makes all the rules!”
Our pollie’s want control, they DO NOT want to serve… IMO, this is why so much is going wrong. There needs to be a return to a Govt that serves the people instead of their Union / Bank masters.
Bryan I think in addition to being a “stepping stone” many of the growing number of advisers who have left could easily be employed as “rocks” to meet the demand that super funds & insurers say exists for their current & new members to speak with a person from this government proposed “qualified adviser” category.
Those advisers were pushed out from providing Product Advice because their education was not at the required standards deemed necessary?
The new class do not need to to met those same standards to Product Advice – so those adviser who left would likely be over qualified?
Very logical?
With respect Anonymous, your view is too narrow.
Many of the advisers who left were highly qualified, had passed all their additional exams, had relevant degrees, but had also had enough of the constant changing of regulations, bullying by ‘authorities’ including compliance, the malignment of our profession, uneven playing fields, broken promises (aka down right lies) by pollies…and so those financial advisers who were young enough took their degrees and skills and found other jobs, and some of us with valuable practices, sold them and retired. Hard as a Rock is correct, many of the advisers who left could easily assist (some would have to wait until their Restraints of Trade have expired).
Are we ever going to escape from purgatory?
Not while we have the Keys…
It comes down to what value you place on the term financial planner, financial adviser or any other term that implies advice matching up as a profession. You don’t see lawyers, accountants, engineers, actuaries, doctors and many other professions given the opportunity to do half the study but able to use the term in full or part. I think these people should be authorised reps of the product with a very tight brief. The word advice, advisor should be nowhere near it. This will confuse the public which a profession is supposed to serve.
I would advocate for a new class of politicians and bureaucrats. The type that doesn’t feel the need to stick its oar into every aspect of peoples lives trying to legislate the standards it dreams up would be appreciated.
What is the fascination with now watering down the profession after just elevating it to a professional level. There isn’t watered down physio’s, dentists, pharmacists, engineers etc etc. All the government has to do is treat the industry as a profession now and significantly reduce the compliance burden.
Yep totally agree. Pretty simple isn’t it……
Deliberate? Any alternative reason is worse?
“They” didn’t think we were smart enough to do the study…and so would have a justification to reduce the numbers.
When we proved we could do it (because our clients were counting on us and we love to serve) we became a threat.
Probably doesnt help that “we” claimed credit for the demise of certain pollies. Just motivates the incumbents to keep removing quality advisers…