In a statement, the financial services training company said the government’s proposed adviser education standards should only apply to comprehensive financial advisers.
“Any legislation on qualifications should be focussed on advisers who provide comprehensive personal advice and not overreach to the majority of advisers who provide only limited personal advice,” said Mentor Education managing director, Mark Sinclair.
“Accountants, life insurance and other advisers seeking to provide personal advice in SMSFs, and who limit their advice to retail clients, should be exempt from the requirement to do a fully-fledged degree as this would entail studying subjects that are not relevant to that adviser.
“For example, accountants should not be required to study estate planning, aged care or succession planning if they are seeking only to provide SMSF advice,” he said.
Mr Sinclair does recommend, however, that those limited advisers study a part of a Bachelor of Financial Planning degree, including a mandatory course on ethics.
“That way, across Australia, consumers can be assured of a standardised and appropriate bare minimum qualification level for limited financial advisers,” he said.
“On the other hand, those advisers who want to provide full financial plans and holistic advice should be required by law to do a standalone, 24-subject Bachelor of Financial Planning degree.”
Mr Sinclair also argued against comprehensive advisers opting for a 12-subject Master of Financial Planning degree or hybrid degrees.
“Depending on existing qualifications and experience, existing financial planners are likely to qualify for credits/exemptions for a great deal of the subjects required by the new legislation,” he said.
“In the case of a current comprehensive personal financial adviser, probably half of the 24 subjects in a degree would already have been completed, with relevant industry experience also being awarded with credits.”
I interviewed a graduate with 18 months experience and a surprisingly low level of understanding of tax,super,age pension and income streams.Turns out his experience was in offering limited advice to company employees. I offered him a role where he would have the opportunity to learn advice and the financial planning process. He was all keen. He then got offered a job by a bank to sell limited advice ( ie product flog ) for $10K more than the market price and he took it. So much for his career and professionalism. The reality is the banks and industry funds strategy continues to be to push product direct via the internet and brainwashed employees. What do we need to do to stop this nonsense.
Limited scope of advice does not say you don’t need to know the potential impact on a client’s financial position. How can you say that you have met “best interest duty” when the limited scope adviser doesn’t know or alert the client to be aware of the shortfall in the advice limitation? How can SMSF not relate to Estate Planning, Age care and Succession Planning? Just that comment alone highlights ignorance and incompetency.
The same people that argue that we are not a profession argue that we should make exceptions in the legislation for limited advice ! Why is it so hard for the penny to drop that professional behaviour involves a comprehensive understanding of the client and the implications of any decisions made.The banks and industry funds insistence on finding shotcuts to suit their own ends is what is killing this industry. We don’t need to ‘become’ a profession we need to stop the banks and industry funds pushing their own agendas.
Do I smell a rat within an educator provider.
You are an adviser or not. if you advise, then you must have qualifications the same as others, whether limited or holistic advice. The issue is the way to attain the qualifications. There is not a single piece of creditable or objective information available to date that answers the question. So, fill ya boots and write away with all the prophecy and ideas you people wish. There is nothing in writing as yet-only proposals. BTW, a masters is on the list and up the scale from a degree. Maybe it is the author of this stupid paper that requires an education.
Great idea and Lawyers and accountants should follow the same model. Just dumb down the initial degree to a Micky Mouse Mentor diploma and then if you only want to do a specialty in these professions you wont have to learn about all that other boring information that makes you competent and gives you context.
This will make it much easier for Mentor to sell a cut price educational solution to institutional call centres so good for everybody….?
Even better this will avoid all that painful consumer protection stuff that was put into place through FSR and FOFA.
How about our profession grows up and works out that if you aren’t qualified you shouldn’t be providing advice. Risk advice should involve estate planning and appropriate ownership for tax purposes. SMSFs are to provide funding for retirees in retirement which means a decent investment strategy and once again Estate Planning.
Stop pretending you can do advice without understanding the clients total position
“SMSF, risk and other advisers who offer limited services should be…”
…called brokers, not advisers and make it clear that they don’t provide advice, just a limited solution.
How silly. Would I want my GP to have only done half or a quarter of his medical training and education?
It is all important knowledge as the ‘limited’ advice you give in one area can have a major or even catastrophic impact on others aspects of a client’s situation.
I find it remarkable and disappointing that IFA has published a story that does nothing more than support Mr Sinclair’s conflicted self interest.
Clearly Mr Sinclair is worried about the impact the proposed education changes will have on Mentor Education which according to their website does not currently offer the proposed level of education required.
I think Mr Sinclair should educate himself on the extremely important linkage between SMSF/Super and risk advice and estate planning. To ignore such important aspects of a client’s situation would be grossly negligent.
This is really about rules not ability. I can think of quite a few Pollies that did not have a degree, in fact one of Australia’s greatest treasurers did not hold a bit of academic paper ! Really this is just another poor fix to very poor legislation.
Good lord- common sense at last !
I will bet Brad Fox’s salary that the AFA position does not even look at the issue
As a risk writer I accept this regime, after allowing for experience
Stupid idea. If we are going to be a profession all advisers should have to jump the same hurdles. Does this mean a lawyer who only wants to advise on estate planning should not have to complete a law degree to be able to do this. Can’t see the Law Institute allowing this one.
“For example, accountants should not be required to study estate planning….”
This is a poor example as estate planning is a huge factor when considering the appropriateness of an SMSF i.e. blended families. There are a tonne of estate planning real case study blunders that involve SMSFs.
Couldn’t disagree more…
“For example, accountants should not be required to study estate planning, aged care or succession planning if they are seeking only to provide SMSF advice,”
Those areas are very relevant and should be considered any time someone provides SMSF advice!!