AMP’s announcement of additional financial planner education requirements has been met with cynicism by some commentators in the advice community.
Yesterday AMP unveiled new plans requiring aligned advisers to be educated to post-graduate level, causing some commentators to question whether the proposed changes will have any impact on conflicted advice.
“It's all smoke and mirrors,” one anonymous ifa reader posted. “If AMP was truly serious about fixing the perception around professionalism they would open up their approved product list, not force advisers to do more study that the majority don't need to do.” Boutique practice principal Matthew Ross of Roskow Independent Advisory told ifa that while higher education standards are always a boost for the industry, it isn’t enough to counteract flawed advice processes. “So the education will reduce bad advice - like really bad advice - but who’s to say clients are getting put first, which is actually the main thing we want to do?,” Mr Ross said. “I don’t think the banks should be. Anyone who has a product to distribute shouldn’t be in financial advice, because it’s going to be compromised.”
ClearView Wealth managing director Simon Swanson agreed that lifting the bar on adviser education won’t “stop bad practices” in the industry.
“Consider the number of highly qualified and highly-educated professionals who have been busted for being corrupt and unethical,” Mr Swanson said.
“In addition to raising education standards, dealer groups need to offer more training and professional development support for advisers.
“Institutions are primarily concerned about making sure the dealer group doesn’t blow up, when they should be motivated by a desire to help advisers deliver quality advice that’s in clients’ best interests.” Similarly, Meridian Wealth Management managing director and principal adviser Paul Dunn said that while AMP’s announcement and similar changes in adviser education standards by CBA are a start, niether measure goes to the crux of the issue.
“You can have the most highly-educated adviser but if the advice process is flawed from the start, the education of the adviser is not going to matter?” Mr Dunn said.
However, other commentators welcomed the move as positive for the industry.
GPS Wealth executive director Grahame Evans said that he believes the changes in education standards by AMP and CBA are an “important cog in the overall search for quality advice”.
“Neither of these actions are likely to put an end to bad advice in the industry but will assist in lifting professionalism in some way,” Mr Evans said.
“The real change comes from clients being empowered to make good financial decisions.”
“Yes, motherhood, but it can only be achieved when clients lift their level of understanding through effective communication by the industry, and dialogue such as is meaningful to both parties, thereby lifting the quality of advice.”
The AFA has also announced its support for AMP’s boosting of education standards, particularly in creating pathway measures for advisers in its networks that do not currently hold a degree.
AFA chief executive Brad Fox said the association will be looking to continue the conversation on lifting the professional, ethical and education standards in the industry through upcoming submissions to the Financial System Inquiry and the parliamentary joint committee inquiry.
“The actions of AMP are a positive trigger to lead the entire financial advice profession further down the path towards professionalism,” Mr Fox said.
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