In a report handed down on Friday, the PJC outlined its views on “adviser education and professional standards”, having conducted consultations on the subject over recent months.
The report recommended a degree minimum for financial advisers, along with the establishment of a Finance Professionals Education Council to set curricula, mandatory ongoing CPD and the attainment of a “professional year” work experience before being allowed to give advice.
It also put enshrinement back on the agenda, arguing that the terms ‘financial adviser’ and ‘financial planner’ should be set out in the Corporations Act and only registered individuals be allowed to use them professionally.
Controversially, the report also suggests the introduction of a “registration exam” for all applicants looking to be included on the government’s adviser register.
The FPA welcomed most of the report’s findings but expressed concern about this latter recommendation, given its longstanding opposition to a national adviser examination.
“The FPA supports the requirement for a professional year, which is aligned with our current experience requirements,” said FPA chief executive Mark Rantall.
“However, we will be closely reviewing the recommendation of a registration exam to better understand the parameters and implications for existing advisers and ensure there is no duplication.
“The FPA has previously not supported the concept of a national competency exam, because we believe it is unnecessary with the raising of entry standards to a degree qualification.”
Yes a degree will prove that one is capable of completing a discipline however, unless one has sales skills and an understanding of behavioural finance,
paraplanning may well be the end result for the aspiring financial planner.
Sales skills are used by all successful business people. You wouldn’t want to employ a graduate who isn’t driven to succeed. I can assure you that there are thousands of graduates who are employed by entrepreneurs who do not have degrees.There are many more that lack basic communications skills and if you don’t have these skills to deliver the benefits, how on earth are you going to get customer confidence to pay a fee for the service that you offer?
Knowledge, sales skills, education, long term industry experience and life experience all complement each other to add value to your clients so you can make a difference to their lives.
Agree, the industry still advertises positions for financial planners/advisers, etc with a large emphasis on sales skills, the two should be split with advisers and planners concentrating on advising and planning. [quote name=”tpo”]Degrees and exams are not the solution. Not against them at all, but the broader problem is the ‘sales’ rather than ‘advice’culture. Until this is eradicated then the same old problems will occur.[/quote]
[quote name=”Patrick Canion”]I’s commend all correspondents to read the PJC report. Amongst the increased educational standards and other things, it recommends:
1) a ‘professional year’ of supervised work for any new financial planners &
2) redefining the terms ‘personal’ and ‘general’ advice to ‘financial advice’ and ‘product information’.
Overall it is tremendously encouraging to read a recommendation to government that comes from both parties – if acted on, we have witnessed the birth of financial planning as a true profession.[/quote]
Oh please Patrick…80% or more of financial advisers have a link to product providers. We are miles away from being a true and respected profession.
Until financial advisers can stand on their own two feet and not be reliant on the banks and other product providers for ‘support, we won’t get the respect we deserve.
Agree with AB CFP.
If we can get the entry point right, we can actually reduce red tape as we finally make the move to a profession.
Qualifications do not eliminate crooks but it is like putting up a good fence. If there are easier industries for the crooks and con me to go to – then let them go there.
Yes to the other comments as well, there are flaws in our industry and education wont be a fix all but it means we will improve to the point where self regulation can be an option.
Now go and enjoy Xmass
PS Politicians should have a relevant degree as well.
I don’t think you can learn to be a politician. You could study political science or study law and accounting to prepare for entry. Some politicians do not have career longevity. How long will Jacqui Lambie and Clive Palmer survive parliament?
We know some of them are inept and self serving. Add a sprinkle of corruption, nepotism, street smarts and stupidity and you have a hung parliament.
Professional planners are in it for the long hall as well as the financial rewards with success. The better prepared one is in the industry the better chance of survival.
My advice is to run your practices as well as you can and don’t worry about the politics because everything will take care of itself for the better. It always has.
just have two distinct licences- one for risk professionals and one for planners….simple fix.
they are two distinct fields and should be treated, measured and monitored as such.
This government is a joke. Introducing more red tape and regulation to an industry that will be decimated by the impending Sovereign Debt Crisis.
Wait till the SMSF property bubble implodes. Regulator…come out come out wherever you are.
Its all about commissions. Remove the incentive and you might solve the problem without this added burden on our industry.
Being part of a Government register??? I don’t trust government full stop.
[quote name=”David”]Surely all politicians also will require a degree moving forward considering the importance they have in shaping our society. Can’t have ratbags without a degree making such important decisions now can we. Whilst we are it, perhaps Politicians also should not be allow to accept soft dollars over $300 pa. It amazes me how often I see Politicians at sporting events with their partners on VIP tables costing hundreds of dollars per ticket which I can only assume they don’t pay for.[/quote]
Hear hear!! Well said David!!
I can understand your anxiety. However, financial planning today involves a broader range of disciplines than it did during its embryonic days. As in any industry, good sales and communication skills are required to deliver a positive outcome where everybody wins. However, I advocate that higher standards of education are a must before entering this field. A good education may not produce an exceptional financial adviser. There are academics with low level communication and social skills. There should also be a period of supervised practical years before one can become a designated financial planner as in other professions such as law and architecture. I am attempting a Masters Degree in Financial Planning and it has certainly opened my horizons and I have been in practice for almost 34 years. Don’t be afraid to up skill.
Surely all politicians also will require a degree moving forward considering the importance they have in shaping our society. Can’t have ratbags without a degree making such important decisions now can we. Whilst we are it, perhaps Politicians also should not be allow to accept soft dollars over $300 pa. It amazes me how often I see Politicians at sporting events with their partners on VIP tables costing hundreds of dollars per ticket which I can only assume they don’t pay for.
I’s commend all correspondents to read the PJC report. Amongst the increased educational standards and other things, it recommends:
1) a ‘professional year’ of supervised work for any new financial planners &
2) redefining the terms ‘personal’ and ‘general’ advice to ‘financial advice’ and ‘product information’.
Overall it is tremendously encouraging to read a recommendation to government that comes from both parties – if acted on, we have witnessed the birth of financial planning as a true profession.
OMG what are we doing? THE FPA needs to leave the country, THE PJC need to get real jobs.
The financial planning/advice industry a degree? more over educated derelicts, hey get Harvey Norman sales team all to have a minimum standard of a degree.
This country has more pressing issues than FOFA and yet we still concentrate on it, first of all the Government cant enshrine the word Financial planner or Adviser, Its also not lawful to dictate commissions the amounts or if its paid.
Mark Rantall please retire before you stuff our industry completely go back to being an accountant, work for the CPA
The more educated the more sophisticated the crime if that’s what you trying to tamp out, good luck with that.
You can issues standards but you cant dictate commissions or minimum education standards. I have 3 Adv. Dips its not the advisers its the product providers.
Should be an inquiry into how to make advice fast and cost efficient to provide then maybe you won’t see as much product emphasis to try and squeeze out a profit.
Assuming we all end up having degrees and other educational standards, then how about the politicians and ASIC start treating us like professionals for a change. That might just start an evolution in advice. At the moment we’re just wallowing from one announcement to another with no cohesion or foresight.
tpo – i agree entirely, we have had so many inquiries of late and not one of them was into vertical integration and distribution tactics. wonder why that is? might have something to do with the millions given to both sides of politics by the banks. even the inquiry that should have been about commonwealtgh ended up being about asic for petes sake.
Degrees and exams are not the solution. Not against them at all, but the broader problem is the ‘sales’ rather than ‘advice’culture. Until this is eradicated then the same old problems will occur.