Established in April 2017, the Financial Adviser Standards and Ethics Authority (FASEA) framework was responsible for setting the standards for ethical conduct, educational qualifications, and ongoing training of licensed financial advisers in Australia.
However, FASEA was disbanded and its duties redistributed as of 1 January 2022.
Appearing on an episode of The ifa Show, WT Financial Group’s managing director, Keith Cullen, argued that despite FASEA being dismantled, its legacy continues to place unnecessary restraints on prospective entrants to the profession.
“I know FASEA as a body is gone, but its legacy remains, which was this ridiculous narrowing of what constituted a relevant degree. You’ll recall back in 2011 when the whole hot topic of what was the idea of a relevant degree and professionalisation was on its way in,” Cullen said.
“When the term relevant came about because we’re supposed to be looking at degrees that were relevant to the provision of financial advice, you know, finance and economics, accounting and finance, business and commerce, business and finance, etc.”
While the framework was in operation for less than five years, Cullen believes that the current qualification standards are still heavily influenced by it, with excessive restrictions continuing to cause issues for prospective entrants and those wishing to re-enter the advice profession using the experience pathway.
“The whole structure of it needs to be rethought through. It needs to go back to where the original thinking on it was, which is to say we want to recruit people that are degree-qualified professionals that have studied in appropriately relevant areas, that have a good broad-based understanding of finance and economics and accounting of monetary measures and so on,” he said.
“Once you have those people, then you need to work out, well, what specific vocational training do they need and what on the job training do they need? And that was the path that everybody thought we were going down. And then this thing called FASEA came along, became a law unto itself, and we ended up with the regime that we’ve got today.
He added: “The previous government recognised that that had all been a mistake. They got rid of the body, but the legacy remains. The legacy’s got to be resolved.”
Attracting younger talent
Many within the profession continue to discuss ways to attract new talent into advice, however, Cullen believes that the issue lies not in the profession being an unattractive career, but in people’s lack of knowledge about the profession as a potential option.
“I know a lot of people are out there talking about this whole notion of, ‘We need to make it an attractive profession for kids to go and study’. Well, my daughter is in year 10 and she’s recently had her careers nights and I tell you, if I had been sitting there with a trestle table with a sign above it saying study to be a financial planner, it would have been a very lonely table to be at,” he said.
“However, there were long queues at the economics and the business and the commerce tables because kids want to go in and they want to study something that gives them options, what I would call a generalist degree. Once you’ve completed your degree or you’re a long way through it, this is a very exciting prospect.”
He argued that the advice profession does have many attractive attributes for young people, there is simply a lack of awareness on their part, and addressing this issue needs to be a top priority for the profession.
“You can come out in your early 20s, you can come into a profession, you can get the appropriate vocational training that sits on top of the generalist training that you’ve already had. You can be sitting in front of clients helping them get themselves organised, that’s an exciting prospect. And not only that, there are very clear pathways through to business ownership in this profession,” Cullen said.
“So, that’s what needs to be resolved and it’s one of the biggest risks that we face … in this profession, is absolutely falling off a cliff in 10 years’ time, and it needs to be fixed. I think everybody needs to turn their attention to what we do about that.”
It was not lost on me how FASEA was established as a body to not only establish education but an ethics framework for our profession.
Then the Board was assembled including Deans from a number of universities who UN-ETHICALLY gave preference to degress achieved at their own universities and ignored the exact same qualifications from other universities.
How exactly can any credence be given to a body purporting to set ethical behaviour standards for a profession that itself acts completely unethically?
Standard left leaning interests which have a “do as I say and not as I do” attitude….
FASEA was a conflicted, manipulated and ideologically based organisation that was far too close to CHOICE, Consumer Action Law Centre and ASIC.
ASIC were having covert input into the wording of certain sections of the Code of Ethics and then were finally forced to admit they had actually paid the costs of 2 academics from Griffith University for the production of a consumer protection focused submission paper when they well knew that CHOICE had provided a submission.
The reason ASIC knew this of course, was because ASIC and CHOICE were very close indeed.
It was an abject failure and was very much designed to eliminate Risk Insurance commission payments to Advisers rather than have any meaningful and lasting benefits to the profession.
It doesn’t seem like the government wants a financial planning industry.. I get the feeling they don’t support advisers but would rather support industry fund advisers
This profession will dwindle in a way where ultimately the unregulated will control and thrive .
Actually I’m concerned for new entrants…I feel that there’s a stronger likelihood, with the development of AI/Roboadvice that advisers (as know them) will actually not be needed in five or six years; certainly wouldn’t recommend it to any young people I know
I wouldn’t recommend becoming a financial planner to any young person I know. This has nothing to do with AI or Robo Advice but more the fact that it is a crap job. I wouldn’t wish it on any kid.