Govt has 'underestimated' impact of education standards: FPA
The FPA has said it is "maintaining pressure" on the government to amend the draft education legislation, saying that the government has "underestimated" the significance of the transition.
Speaking to ifa, incoming FPA chief executive Dante De Gori said that certain changes to the draft bill need to be made in order for the soon-to-be-operational standards-setting body to develop an appropriate transition pathway for existing advisers.
These changes include permitting the new body to consider a financial planner's existing training, qualifications, experience and CPD points as prior learning.
"We're keeping the pressure on and we want to be clear about our concerns," Mr De Gori said.
"I am concerned about the management of the transition. I believe that the government and Treasury have underestimated the significance of the transition."
Requiring all existing advisers to complete a university degree is "neither practical nor appropriate", Mr De Gori said.
"This does not mean that existing financial planners are not required to do more. In some cases, existing financial planners may need to complete further studies. In addition, some will be subject to a code of ethics for the first time," he said.
"Under this, they will be required to complete an exam and there will be minimum CPD criteria for all. The bar is being raised, but we ask that it is done in a sensible way. We are also asking that the new independent body has the opportunity to do what it is tasked to do."
Mr De Gori added that if these amendments are not made, the industry may experience a dramatic fall in adviser numbers.
"This would impact tens of thousands of clients and hundreds of small planning businesses, many of which would have to close doors and shed employees," he said.
Further, the proposal to have the standards-setting body develop the new code of ethics will have "unintended consequences", Mr De Gori added. Unless industry members are represented on the body, any new code would lack legitimacy, he said, and would compete with existing codes.
"For these reasons, it would be better to give the new standards body the legal function of recognising existing professional body codes of ethics, subject to 'a criteria' to ensure consistency," he said.
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