The Labor Party intends to significantly ease the education requirements on existing advisers by axing the need for experienced advisers to return to university.
Speaking at the Association of Independent Financial Professionals (AIOFP) conference in the Hunter Valley on Wednesday (8 December) evening, Labor’s financial services spokesman, Stephen Jones, said his party would not require advisers with 10 years of experience and an “unblemished record” to complete a university degree to practice.
“The Labor government will not ask you to take a bachelor’s degree to keep your qualifications. We’re going to assume that 10 years of experience is worth at least a degree,” Mr Jones said.
Currently, Morrison’s government necessitates all licensed financial advisers hold a tertiary degree, a hurdle blamed for the mass exodus of advisers from the industry as many experienced practitioners choose to shut up shop over returning to school.
Mr Jones did, however, clarify that Labor’s goodwill would not extend to the exam.
“To be clear, we are not going to scrap the financial standards reforms, we will still expect advisers to pass their exams, to meet the continuing professional development requirements and abide by an appropriate code of ethics,” Mr Jones said.
“But to send you back to university when you’ve had over 10 years of experience in the industry and an unblemished record is a waste of public resources and your resources.”
Assuring to also double down on the red tape in advice, improving both cost and accessibility, Mr Jones said a Labor government would “clear the way” so that advisers “can get on with the job of providing the valuable advice people need at a cost that they can afford”.
His words are considered a major shift in Labor’s policy, as the party distances itself from its greatest opponent, the Liberal Party, ahead of next year’s vote.
Commenting on Mr Jones’ big announcement, the AIOFP’s executive director hailed it long-awaited “common sense”.
“At last some common sense where prior learning and experience is being recognised instead of the draconian and nasty approach by the government,” Peter Johnston said.
“That light at the end of the tunnel is looking good.”
Last week, new figures from Wealth Data revealed as many as 2,062 advisers have left the industry since the start of the year, while only 144 new entrants were recorded.
While some “experienced” advisers may well have an appropriate level of knowledge, many “experienced” advisers are just salesmen who have a lot of experience at selling. These are the advisers that we need out of the industry, but Labor has just given them an option to stay in.
Does everyone forget that Labor were the ones who pushed for the royal commission in the first place?
The industry was already on track to making most of these changes. In 2016, 2 major licensees stated all of their AR’s had to have a minimum of a masters degree and as a collective the industry was advancing as a profession.
All labor ( In particularly Bill Shorten) did was push for something they had no understanding about without consulting the industry and now they are trying to distract everyone with this sugar coated poor attempt to gain popularity.
So O’Dwyer undertook meaningful consultation with industry? Advisers are never stakeholders to be consulted, by any party. What sticks in the craw is that incumbents profess to be friends of sdmall business. What if they were enemies?
The AIOFP engaging with Labor is important as for too long the LNP has taken our vote for granted and then allowed us to be pilloried by the press and the consumer groups as it suited their agenda.
I can’t bring myself to vote for Labor but the LNP and Jane Hume need to start working with us properly.
Rather than abandoning the new education rules I would prefer that they just became less complex. Anyone with an existing tertiary qual and a DFP and ten years as an AR. I had have a business degree and a grad dip in economics as well as thirty years of experience but would be compelled to do four subjects to satisfy the new requirements. Yes did FASEA and ethics and found the ethics course very good – FASEA is a waste of time but the code of ethics has merit albeit still needing to be dragged back to Corps law
As with other comments, we need higher standards and I am not excited about an adviser with three DFP subjects being given a free pass to continue as AR even with ten years experience. Either invest in your education or find an industry that has much lower barriers to entry, like real estate. For these advisers a grad dip equivalent should be a minimum
Labor removes Uni degree needs, followed by ZERO Insurance commissions.
Be careful what you wish for advisers. Labor is not your friend.
Why not have 10 years experience be credit towards the grad dip? I mean it really isn’t that much to ask an experienced adviser to do 3-4 subjects, it really isnt that much and continuing to learn is what our industry is about without the continual learning you will be left behind and your clients will suffer.
Anyone who disagrees probably shouldn’t be in our industry and should definitely be out before we are a profession!
Uh, that’s not cool. Most advisers need more education, especially in investment management, where portfolio construction and implementation is often sub-par. Blissful ignorance by many.
and those thinking that they can be general advice only. shows we long long way from being a profession,
Um, and the advisers who’ve already spent thousands of dollar and gotten through a large number of subjects towards the degree??? Stop changing the goal posts. How’s this fair?
Goal posts have been moving for years.
Would you go to a surgeon who got qualified by having 10 years experience?
I would if they had completed the qualifications required in their day over a fresh face surgeon with a new degree and no experience.
You see, a surgeon or Dr might have a degree that was completed 40 years ago – and I do not expect them to be forced to do another degree.
Depends if he had a degree or not.
Labor proudly announced that FOFA was to enable consumers to get affordable and professional advice back in 2012. They said that they would like to remove commissions from products before then but were thwarted by the oppositions Mathias Cormann stating that this was and is unconstitutional at law. When the Liberal party got in, the madness began to get worse. All that the Libs stood for and stated so in opposition, they went back on once in power. So, my question is simple. Where was the Labor party when our industry was being decimated bit by bit by the Liberal party. From LIF to FASEA to retrospectively removing grandfathered commissions on products before 2012 to whatever else. Silent. Stephen Jones now says with Labor, they are on board with us. Really? Why? Oh yes, that funny event called an election and we need the votes says Labor. When someone shows you who they are in the first instance. Believe them. Labor or Liberal, they have proven themselves to be unworthy of government and cannot be trusted to do right by you or the voting public. Be this at a large economic level, or at the micro economic level of your business They don’t care about us as advisers, your clients as voters or your business. Once in office, they will further the cause of Industry funds as they see this as their utopia, despite the awful outcomes of LIF impacting on current insurance takeups, the despicable contracts on IP, which are not legally worth the paper they are written on and would produce horrible outcome to consumers, leaving you, the adviser to blame. Don’t get me wrong, I do agree with the stance on exemption for those over 10 years, but will Labor impose, say a bi-annual exam on the industry….you know, just to keep us in check? Don’t trust Liberal and don’t vote Liberal at any level, but don’t be blind voting Labor either. Please….for you and your business and most importantly for your client. They simply don’t care and have proven this to us time and time and time again.
Better vote for more of the same then.
No shortage of Uni Graduates here who are so smart they cannot solve the advice shortage that continues to grow. They are more interested worshipping their degrees on their office wall than helping people in need. Burning months each year in study is not going to solve that problem at all.
Please please please… dont defer your studies. Dont hold onto this glimmer of hope that you’ll get a reprieve. It wont be a priority for a labor government, it will take forever to go through the legislative process. Something will hold it up, then something will happen and it wont be legislated. Labor will say “we tried”, they wont really care. Then you are 2 years out from needing the grad dip, and up against it. Just get the units done. If you know what you are doing, you’ll pass no issues – and you will have options.
It’s a moot point now. Stephen Jones should be embarrassed he made that proposal with a straight face.
Would you rather an experienced adviser WITH fasea/tertiary quals, or an experienced adviser WITHOUT.
The former will clearly have a competitive advantage.
At best, it might save a few of us who already have tertiary quals the prescribed fill-in (1-2) subjects.
Hardly a game-changer.
What Labor are saying is an older adviser with decades of experience (when university equivalent financial planning courses were not available) would still provide a positive outcome to the consumer. How is it detrimental to the industry to allow these individuals to retire gracefully (instead of being forced out of the industry)?
I am a fairly new entrant into financial planning, ten years ago. I did complete a university qualification specifically in financial planning, I have also completed the FASEA exam… but am still yet to do the bridging course. It is complete nonsense that one of my final subjects in university (professionalism and ethics), but yet I get the opportunity to pay another provider for the privilege. The whole FASEA bridging course and exam is a complete cop-out.
Surely Labor’s plan provides a more common-sense approach than the cut-throat approach the Coalition had to our industry?!
I know a financial planner that failed the investment component of the original 8 unit Diploma of Financial Planning four times. He gave up and walked away with four subjects of a Diploma course completed and yet is still out working today. I considered him a dodgy self centre individual with little thought for only himself and more convinced of that then ever….the only thing is I’m certain they’re more like him
That is an issue of character. If the financial incentive is there, these dodgy people can complete the required study, it does little to improve their character. I’d also note, passing courses does not make someone proficient, experience however does.
It’s a sad reflection on Financial Planners that so many are unprepared to go out and get what the wider community sees as a minimum operating standard….a lousy Grad Dip which literally involves a few hours…Definitely won’t be voting Labor now…I can see the headlines…”Labor wants to lower consumer protection by making it easy for dinosaur advisers, feed on the gravy train of volume based bonuses and Nil entry fee products to remain.” Not a good look for the industry. I know there are a lot of advisers that will be disappointed by this move.
who can be trusted? Look what Shorten (Labor) has done to our industry let alone our existing government. Very sad to say the least.
In the jaw-dropping event that a Labor government actually keeps its promise and puts up this policy as legislation, would it pass the Senate?
Im actually just chuckling for a cheeky minute thinking about the panic in the Registered Training Organisation budget rooms………..
“Boss we have just received another batch of deferral forms” 😆
Its disappointing to see the number of respondents who equate professionalism with education. The current tertiary offerings are little more than tick box learning from sausage factories which allow you to put initials after your name. As a Risky all are inappropriate for my discipline. Professionalism is a reflection on how you behave, your relationship with clients & the outcome you achieve from them. You don’t stay in business in this profession for 10yrs without looking after clients, keeping up to date, & maintaining a clean compliance record.
The way you describe professionalism is at an individual level. Getting a educational qualification is more about how the wider community and Australians perceive you and your peers. It’s much bigger than you. What you describe is all about YOU. and your lack of educational qualifications reflects your own selfishness. Industries continually get kicked in the head by Government and others that are looking to shift the blame. It’s not hard to stay in an Industry for 10 years and fly under the radar.
I totally agree with you. Too many advisers have survived and continue to survive by “flying under the radar”. The knife companies and the risk aligned licensees have protected the old “lifies” for years just to keep sales up. The future of the risk only adviser is bleak because direct distribution supported by ever improving tech provides a cheaper and more reliable experience for the client. The very vast majority of risk needs are very simple and don’t need an adviser. The more complicated situations need to be handled by a well educated holistic adviser who understands the clients total situation
Risk only I totally agree. Lawyers have degrees and then take 20% of a clients tpd payout just for completing some documents. Those who think education = professionism are fooling themselves.
At last some good news !
I wonder if they will apply this 10 year rule to all professions ? The advisers that have already coughed up $5k or $10k on Uni courses must be happy with this.
You have to draw a line somewhere..
Labor have finally woken up and realised there are thousands of rusted on coalition voters up for grabs, plus their families, employees and many of their clients. Smart move. The coalition is stuffed now
hahahahahahha pull your head in… This won’t make a material difference to anything
Won’t make a difference you say – so why is Labor doing it?
Great response?
It is actually a good answer if think about it. Given the polls and the skill level the current government to shoot itself in the foot, they don’t NEED to do this. So they obviously see the value in making this move.
Stephen jones – wasn’t he the one fundamentally opposed to commissions in insurance? A degree might generally only result in better educated and higher paid rogues, but it is what we need to show we are serious about differentiating ourselves. We need a mid-tier ‘sales only’ / limited scope role to fill the gaps, not to be lowering the bar. I am over 60 and doing the study because I will benefit from it, irrespective on career decisions.
Jones has changed his tune because Labor now realise financial advisers could win them the next election. Simple as that.
Plot loss by Labor, that is an embarrassing announcement by Labor, quite unbelievable !!!
Maybe they could extend this exemption to Doctors, Lawyers, Architects, Nurses, Teachers etc etc, who needs qualifications it is only money right ???? Banking Royal Commission, oh that thing where there were Financial Planners who had no idea, oh well.
Typical foolish Labor. The industry was finally in track to become a truly professional and respected profession and Labor, just to a few more votes, will send us backwards. Thank you to all the professional advisers who have got onboard making us better.
Just shows that politicians don’t understand the laws that govern us. No planner with more than 10 years experience is being forced to do a bachelors degree!! If you have that level of experience and obviously hold some financial planning qualifications, the most you are required to do is an 8 unit Graduate Diploma with most planners getting credit for prior learning for at least 2 subjects. So 6 units of study that most people could’ve knocked over by now, if only they do what they’re paid to do….which is planning….amazing the number of planners who want to continue in the industry/profession but who have failed to adequately plan their time to make sure it happens…
Anyone who believes the ALP will ever do anything which is supportive of Financial Planners also believes in the Easter Bunny, Santa Claus and the tooth fairy.
I have been a planner for 34 years and already had the required Degree qualifications to get most credits under the new requirements. I did not support the requirement that everyone had to sit the Mickey Mouse FASEA Exam which involved a lot of wasted time in preparation and sitting, which afterwards was of no benefit to clients.
If you look back through the whole FOFA implementation, this was driven by Chris Bowen and Little Billy Shorten and that was the first nail in the coffin of making advice more affordable for those who really need it.
Stephen Jones has come out with many comments in recent months regarding superannuation and financial advice and in all cases has demonstrated who has not clues what he is talking about.
DO NOT TRUST LABOUR to support us.
Industry Super has seem an massive increase in FUM and the elimination of almost all competing Product Providers – I would never vote for Labor but they do seem to know exactly what they are doing.
What a joke! Just when we are getting close to being considered a profession, this gets announced. Get your study done and get on with the job. This is as embarrassing as the Poms batting at the Gabba
Accountants are considered professional but aren’t required to do retrospective degrees.
because they had degrees already – not a dusty old diploma and no further study
True but big difference is they had to do the relevant degrees to start (like lawyers, drs, et al), not just moving across from a non-related role and set up a new shingle as a lot of us have done. We need to get more professional if we are ever going to move above the trust factor of used car sales and real estate agents…
But they did degrees didn’t they. I agree with Scott – get out there and get the study done.
Because nearly all of them now have degree’s. I’d rather they fix the actual issues with financial planning rather than make this change and then use it to justify increasing compliance due to “planner’s not being qualified”
since when has a politician kept a promise?
A much better headline for mine would have been- “Labor will support scrapping all unnecessary red tape regulations to save advisers and clients money. In addition we will promote the many reasons why Australians should seek advice including making their advice costs tax deductible”
Now that would be worth voting for…!
They might – but they will want advice delivered via Industry Super employees only.
If they get it on this promise… they’ll just take away commissions on Insurance and drive business to Industry Super funds. These no question that Unions run Labor, and the last time I checked the “credentials” of most Industry Super fund board members, it didn’t surprise me they are majority Union affiliated. Labor’s strategy, show you the single treat while taking away the jar…
Poor and ill considered policy is always going to be overturned.
Standards can improve without seeing people who are experienced (more relevant than any education) at a stage of life where dedicating time to further study is not going to get the benefit to outweigh the cost
“More relevant than any education”. Now there’s the problem with our industry. We MUST get rid of that attitude.
Likelihood of an adviser without a degree passing the exam isn’t very high, but I’ll damned if this doesn’t win a few votes.
Passed the exam first time no degree
Been an advisor 23 years, age 48
Sitting close to other candidates?
So I guess you are saying that if people pass the FASEA exam then no degree is needed – I might agree with that. Good point.
We now need the libs to see the light , and support a similar easing of the rules for advisers who in many cases are 0+ and have 30 years experience. We support this type of decision for advisers authorized prior to the cut off date for the FAR register to be grandfathered but still required to do a FASEA type exam each 4 years if they are not going to do the degree.
Grandfathering. Its the industry’s history of propping up advisers who think “time in the job” is a qualification by using “grandfathering” escape clauses for no other season than to keep advisers numbers up that has helped hold us back.
How ridiculous. The education standards needed to increase. I had 6 qualifications including 2 degrees. I had to upgrade my studies, which I have now completed, and believe everyone needs to upgrade from the current diploma system. Why? Since the introduction of Registered Training Organisations (RTOs), they were providing weekend diplomas that enabled any ‘sales person’ to enter the financial planning space. A lot of people entered financial planning because they believed they could make a quick dollar. Now, the new requirements mean you have to think seriously about entering this profession or remaining in it. I want only want the best to remain in the industry and I am sorry, but 10 years experience in selling products, does not equate to being good in this profession anymore. Labor has never been there for the financial planning industry in the past and where the ones who initially caused all this heartache, especially after the Royal Commission. I am tired of Labors policies which is always about ‘selling themselves’ and trying to win by appeasing minorities or certain groups. How about Labor taking a hard stand on something that actually benefits people going forward rather than watering down everything around them. Labor, in my view has only destroyed jobs, families, culture and more. They are even considering going into bed with the Greens to simply remain in power…it is all rhetoric. Once in power, they will make ridiculous laws that will continue to destroy small business and family culture.
Lots of “l” in here
That’s the problem with the industry. Too much focus on the adviser and not enough on the clients.
There we go, a good cohort of advisers can continue to take the mickey if Labor win. The won’t win though, let’s be honest.
They’ll absolutely romp it in.
I think that the regulatory burden will start reducing, income levels/profits will start increasing, as we improve our education standards and have fewer advisers still standing
It’s going to be a Liberal blood bath and Gladys wanted no part of it.
Great, our strive to be a profession would be down graded.
I am over 60, over 30 years experienced and knocked over the requirements in 19 months….oh and I did the Masters as well. I am just amazed, by those that always want the easy route. Just do it….you have until 2026 anyway ad most will only have to do 4 units.
Careful what you wish for with a politician just wanting to appease. Look for the sting in the tail.
Kudos to you mate. Don’t be amazing at people taking the easy route… That’s why we are where we are
Totally agree with you mate – I am 62 and went ahead and knocked of all the quals requirements earlier this year – it required effort. Guess what it is an easy sell to advertise that all advisers in our team have completed their degree requirements – and let the client choose between us and unqualified / uneducated advisers. Go figure which way they will go
This finally is some sensible policy. Adviser numbers are starting to drop dramatically and this will only drive up the costs for retail clients unless adviser departures versus new entrants balance out more evenly going forward. Sensible policy to promote ethics and an exam however the exam should be better targeted to the industry. I am a stockbroker and an exam specifically target to our sector would be a better outcome for our clients.
Sounds like you are saying that law and ethics aren’t applicable for stockbrokers.
What? By taking out the ethics component?
Pandering to AIOFP types is not a vote winner. This “promise” is a very nice gift to the coalition. We can all imagine the headlines…
This is a very silly idea. Just because you have been in the industry for over 10 years does not mean that you are suitably qualified or up to date with what needs to be done. We are in a profession that is rapidly changing, it is getting more complex and there needs to be a studying aspect for advisers to get up to speed.
I spend my days cleaning up after “experienced” advisers and get their clients compliant and fix their errors. This is a huge undertaking and the blatant disregard for procedure and compliance cannot be ignored. These advisers need to do further study.
Is a Uni degree the right thing? Probably not, as these are not particularly current or have topical subject contents or realistic scenarios for assignments etc. But there needs to be more than paying lip service to CPD requirements and to actually improve advisers skills.
As so many advisers are saying they are struggling with the exam and having to do copious study for what should be standards they should be using for every client, we can only gather that other advisers are also struggling with other concepts. Scraping the uni requirement all out is reckless.
The newer financial planning degree graduates I’ve seen are able to utilise their tertiary learnings to baby sit and pick up after experienced advisers from compliance, best practice, and technical perspectives. It doesn’t help with things like good relationship building and client engagement, but beyond a few behavioural science, clinical psychology, and other such obscure subjects show me a degree that does.
I do agree however the more technical CFA based and other such financial degrees without specific electives don’t cover what’s needed.
A Uni degree is the right starting point and some are better than others (all could be improved). Even the FPA CFP framework is imperfect but again; it puts any competent student well ahead of the majority of non-tertiary qualified advisers currently practicing.
The whole reason for the degree requirement was so the claim hairdressers have higher requirements than financial planners stopped as planning moves to a profession. So if i did my weekend course back in 2010 i dont have to do anymore study? Doesn’t sit well with me
What?? Common sense from the most unlikely political source???
But it’s not common sense….Stephen Jones obviously doesnt know the educational requirements that advisers of 10 years standing need to meet. Hint….it’s not a full bachelors degree….
The education thing has become a joke! Fast forward to 2031 and no one will even mention it. Get your grad diploma and you will be fine
What about those Advisers that have already left the Industry based on the existing requirements?
The problem would be?
Will never happen in a million years. Unless they are willing to refund all Advisers who now hold an AQF Lv7+ degree (who obtained recently due to regulation reforms) and have 10 years experience…
They’ll give this then ban insurance commissions anyway