Minister for Revenue and Financial Services Kelly O’Dwyer introduced the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 into Parliament in November 2016.
The bill passed the House of Representatives on Tuesday, and the Senate today without amendments.
The education bill includes compulsory education requirements for both new and existing financial advisers, supervision requirements for new advisers as well as a code of ethics for the industry.
The bill will also mandate an exam that will represent a common benchmark across the industry and an ongoing professional development component.
The new professional standards regime will start on 1 January 2019, whereby new advisers entering the industry will be required to hold a relevant degree.
Existing financial advisers will have access to transitional arrangements allowing them two years, until 1 January 2021, to pass the exam, and five years, until 1 January 2024, to meet the education requirements.
Kelly O’Dwyer hold a Degree in Law and Arts from Uni of Melb.
Proof point right there – clearly a degree is no indication of attaining common sense, real life acumen, or even the ability to distil knowledge of an industry based on information provided to her.
Gees, there are a bunch of crusty advisers here throwing a tantrum about our industry becoming a profession! Funny how support & resistance seems to be split along generational line.
Younger advisers, who suffer the reputation damage of “bad apples” that come before them, have been enthusiastically embracing the higher-degree standard. Its a shame that it doesnt come into effect sooner!
A degree-standard is a meaningful barrier to entry and will lift the standards of our industry! This is a great thing! Those trying to paint this in a negative light are showing incredible levels of selfishness “but, I don’t wanna study..”
Its incredible that these 30+ year veterans fail to acknowledge that the period in which they clocked those years of practice were so conflicted that the all these new regulations have been deemed necessary. If you’re 60 now, you have until yo are 67 to get a degree or cease being an adviser – note that nothing in that is forcing retirement upon anyone, you could move into mentoring/consulting roles – but then again, if these advisers weren’t so static, we wouldn’t be having this conversation.
As you sound like you have a degree, you would never pay the likes of these old guys a reasonable amount of $$ to be mentored or consulted by these OLD GUYS as you already know everything due to you having a degree!
Stop being so high and mighty and accept that someone whit only 7 or 10 years of working life left is not useless but at the same time can and could not justify (cost, time and ROI) a multi year study plan.
Someone with 7 years left will be unaffected as it times nicely with the requirement for existing advisers to up-skill or move on.
Somebody with 10 years left, has 7 years to take appropriate action – and that time frame excludes the fact that it has been obvious for a number of years that this is where in regulation was heading.
So complaining about a change that is objectively good for the industry, just because some individuals (who have had ample warning, and have ample time to obtain degree equivalency) have to complete further study to catch up to those for whom this is a non-issue, is mind-numbingly selfish.
If you don’t want to complete further study, that’s OK & it’s your choice. Move out of the way.
Dont try to conflate something that is “bad” for you as being bad for the industry
no we aren’t, we are saying that 30 plus years (and ongoing education along the way) actually counts for something.
So you have a 3 or 4 year degree. Great that’s how many years experience dealing with clients, underwriters, claims, Fund Managers. etc?. EXACTLY ZERO. Now compare that to the practical hands-on experience of someone with just 15 years experience, now think about double that. Before you think I’m a no-degree old risky, think again. I have NOTHING left to study except perhaps a Masters in Financial Planning (I have that in a similar field already.) Just sick to death of hearing how experience counts for nothing from the younger generation who still have none, but who think their degrees somehow magically give them this experience. As I have long believed, a degree merely says you have the capacity to learn…and don’t get me started on a degree = great ethics! Bah Humbug!
What pray tell are the education requirements and continuing professional development requirements for Members of Parliament? We have some real “doozies” in there at present and they are running the whole country not just a little advice practice.
So how is all this relevant to an ‘ol “lifey” like me? 33 years I’ve been helping clients get appropriate and well planned cover for IP, trauma, TPD and death and I’ve never once needed the DFP knowledge I studied and spent money on. I’m tarred with the same brush as full financial planners, having to get irrelevant (to me) extra expensive qualifications! Why no special consideration for a ‘risk licence’ in this scenario. I’m 56 now and I can’t see any benefit in my paying more money and countless wasted hours (better spent with clients!) on a whim of these pollies justifying their jobs, especially this ‘know it all’ Kelly O’Dwyer who demonstrates over and over and bloody over again that she has no clue. All she does is listen to the disgusting ‘special interest groups’ and implement what she is told. She understands zero about what’s important, like most pollies. IF any understand then they don’t care past the next election. [b]What the hell is O’Dwyer in that position for then?[/b][i][/i] What are HER QUALIFICATIONS?
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The very BEST suggestion I’ve heard in a LONG time was made previously in this comments thread here that the idiot politicians that are responsible for running the country should be made to get similar qualifications. We should insist the politicians (and real estate agents for that matter) all have degrees in economics, social welfare etc etc etc, BEFORE they are allowed to stand for any election to govern the country and control people’s lives and jobs! Why is this not accepted as law already!?? Oh yeah, because THEY are the ones who get to make the rules (laws) and vote themselves pay rises and working hours and perks and benefits and golden retirement packages. Absolutely bloody stinks, no ifs or buts.
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We advisers do more for ordinary Australians than these politician freeloaders and THEY get to control OUR careers and lives. Something BIG wrong here people! I’ve no reason, for my client’s benefit, to do this extra ‘study’ to satisfy the election wish of free-loading pollies. I’ve just today had 2021 carved in stone for my retirement away from our once great industry, now just a sick sad sideshow. Once I can get my super tax free I’m OUT! Shame, as I’d intended to continue helping my wonderful clients up to and possibly beyond 70. [b]THANKS, you great UNQUALIFIED politicians.[/b][color=blue][/color]
The Life Insurance reform will sting as well. You can only churn once every 2 years
Is that meant to be sarcastic Ralph? Please explain Pauline?
What a stupid comment. this is meant to be a professional forum Ralph, have some decorum and stop displaying your oligophrenia.
While I understand the current push to higher educational standards, I do also agree with your comments Brian.
There has been a carve out for the ISA and their lot regarding advice and compliance, why not also involve a carve out in our industry depending on the advice you provide, especially for businesses that only do Risk Advice?
The approach to this has been simplistic and short sighted. What a disappointment Malcolm has been, and in particular this one choice in appointment of office with hells bells Kells.
Can someone clarify if you are Advance Diploma, been many years in the industry but not a Uni grad. Other than siting the exam where does this sit with being degree qualified? Are there bridging exams required or do you have to go to Uni for 3 years and do a degree in any non relevant subject?
An education body which is yet to be formed will decide what you will need to do…….none of us know the answer yet.
Degree or degree equivalent refers to a being AQF level 7 or higher. ADFP is at a Level 6.
A grad cert, grad diploma would get you to AQF 8.
A Masters degree would get you to AQF9.
[url=http://www.aqf.edu.au/aqf/in-detail/aqf-levels/][/url]
Correct, they have also said there may be bridging courses formulated.
Even still, you can do a graduate certificate in 6 months. Study periods about 3 months, two subjects at a time. Problem solved, the sky isn’t falling.
You can’t do a graduate certificate in 6 months if you are working fulltime. And you can’t enrol in a graduate certificate until you have completed a degree. (That’s why it’s called a “graduate” certificate).
Incorrect on both accounts.
You can get into the graduate certificate of Financial Planning with an ADFP and relevant experience. I did this.
I have also done two subjects in the one study period while working fulltime. Its quite easy when you already work as a planner as we are all ‘experienced’ enough to already know most of the course work, right?
I think we would all be surprised what we are capable of if we stop complaining and just get on with it.
Thanks for the help Reality. I looked at the graduate certificate of Financial Planning with Kaplan on their website and I can see what your saying. It states requirements are “A related* Advanced Diploma or Diploma deemed acceptable to Kaplan”. It also states to achieve it there are 4 core modules and you get 3 years to complete. Is this what you did and are you now AQF8 equivalent by having this and the ADFP? Thanks
I could not agree more with you Reality. If you already know the work the study will be easy and the exam quite passable.
Well, this legislation should “professionalise” the Financial Planning industry. Now there is only one other group that should be forced to pass an exam, demonstrate their experience, and get a degree – Politicians.
If the so called experienced planners above are scared of one exam then you probably should leave now
The Don Nguyen? Ex CBA?
Yeah, Hahahahaha! I think that’s him. Great to hear from someone [i]’experienced’ [/i]in compliance problems eh?! To funny!
Great to see that the FPA / AFA stood up and supported their advisers. #governmenttyesmenandwomen
This will stop all the Crooked Advisers that want to do the wrong thing NOT!!! Get Real!!!
This will simply weed out allot of experienced and highly skilled advisers who do the right thing by their clients. We have done our study and degrees and provide great advice. JOKE!!
The public are the ones who will suffer here!!
The FPA and AFA “leadership” don’t care. All they care about is getting “compulsory membership” legislated and sponsorship money from the FSC cartel members. And of course as history has proven getting offered plum jobs after selling out their members and customers.
Perhaps someone can clarify, I recall it had been “accepted” that an adviser who is currently CFP (but not degree qualified) already satisfies the educational requirements. They obviously still need to undertake the exam.
No….incorrect. The FPA is pushing for this however only for those who completed all the CFP units.
That is what the FPA wanted. There advice was not accepted.
Definitely not. You are referring to grandfathered CFPs. Although the FPA is lobbying hard to sneak through grandfathered CFPs who have not completed any education above basic diploma level, the regulators are wise to this, and have put their foot down. As a result, those CFPs who have completed a degree and then further postgrad training and examination, are being required to repeat much of it. CFP has been deemed largely worthless by the regulators, because of the minority of grandfathered CFPs.
If the FPA was consistent with its professionalism rhetoric, they would demote the grandfathered CFPs, and the remaining “real” CFPs would then get full exemptions.
I had this argument with a “cheque writing CFP” prior to Christmas, do the education like everyone else and stop thinking you deserve an exemption the world does not owe you and if the rules get changed adapt. If you want to be taken seriously then stop lobbying for special deals.
Will Robo advisors have to sit for the exam?
Great question ?
Nothing wrong with lifting the bar in terms of education and I don’t mind proving my knowledge via an exam. However, requiring a degree of long standing participants and failing to value experience stinks of political and commercial interest over lifting the quality of advice. How about we apply this to all industries in years to come?. This decision indicates that a diploma (or any other trade qualification) is not worth the paper it’s written on, ongoing education over 25 years is no longer relevant and experience, whilst important on a job application is not as essential as we all once believed. If I was younger (I’m 49) I might see this as an opportunity to build my knowledge, as I’m older however with fewer years of work life ahead than behind, I will just take it as an insult and an indication that my professional body believes that I and my colleagues have learnt nothing over the past quarter century.
[b]For financial planning to be respected as a profession, by general public, the barriers of entry need to be high, perhaps even higher than accountants and lawyers. We have far more responsibilty (and let’s face it, we often care more) than them.
It doesn’t mean all you existing advisers with 30 years or so experience are no good or that you need to learn something you don’t know. It just means that unfortunately you need to be sacrificed for the higher good – lifting the perception.
At least you still have a choice – study up or quit. You probably won’t learn anything new if you choose to study, but you just need to do it. Or sell your practice, get paid good money and stop whinging.
And as for the soft skills, most of them already became obsolete (maybe without you noticing), and the rest will be learned over time by new advisers and planners.
I do a friggen exam everyday. If I give crap advice I get sued, lose a client or don’t win the business, it’s called natural selection..This is really just a bit of political, look at us we’re doing something. Bring on a royal commission in to those real crooks, the buck passing ”it’ wasn’t me it’s the planners”’ Mr CBA Banker. As a University lecturer I can attest that exams don’t determine your real knowledge and Universities are moving away from examination formats…but I guess they’re not interested in learning just enforcement which begs the question is this the most effective way.
This bill is justified by the ‘advisers’ saying they are going to leave the industry because they need to do a little study. If you’re as good as you say you are you’ll breeze through the study and ace the exam.
It’s no wonder there is a lot of sub-par advice out there as so many people just aren’t committed. Writing has been on the wall for so damn long people.
You could say that, but you’d mostly be wrong. im in my 60’s, im not even vaguely interested in doing 2-3 years (or whatever is going to be required) study, to retire with a new degree
If you’re in your 60’s, I am assuming you were going to retire in a similar timeframe anyways? You’ve got until 2024 before you need to meet the education requirements, what’s the inconvenience?
We should be happy would could practice this long without the education requirements of a profession.
Or you can hire a junior planner to be client facing in the business while you sit back drawing dividends and mentor the new up coming adviser and potential purchaser of the business when you do decide to retire completely.
Good riddance GPH. I’ve got 18 years in the industry and I’ve managed to go out and do a Diploma and Graduate Diploma in that time frame and I always believed that a Bachelor degree is a minimum. I’ve also believed that we need to move towards being a profession, in order to prevent over regulation and part of this has been having a certain level of education. If you’re in your 60’s and don’t meet the requirements of education you obviously are 1) Lazy 2) just in it for the money 3) don’t give a rats about the industry you work in. We don’t need advisers like you. It’s guys like you that cause guys like me to be tied up in FoFA red tape and suffer the negative perception of the media. I predict easy days ahead for new people entering the industry post 2020.
when you have (like me) invested double your years of, industry experience, you can presume to judge me.
until then making stupid and ill informed comments isnt helpful.
that’s disgusting 36 years and you never bothered to care to lift standards. probably nothing more than your Kaplan training or a multiple choice quizz . No wonder this industry has such as poor standard. Thank god you’ll be gonski soon. The sooner the better. Just because you think you lived through the 1987 stock market crash does not make you a band better adviser then the adviser that lived through the events of the last 10 years.
Jason, who the hell do you think you are speaking to GPH like that?! You don’t know anything about him. He could be a pure risk adviser like me and, quite correctly, not see the relevance in doing these extraneous exams just to say he’s ‘more’ highly qualified. We don’t need the higher qualifications for risk advice being fostered upon us at great time and money cost. It will make zero difference to risk advice. We have advisers who excel at full financial planning to pass this work over to, advisers that don’t like doing risk work. Know the whole story before you denigrate your fellow advisers, there’s enough fighting with special interest groups and opportunistic pollies in our industry than to turn on each other. Wake up and show some respect.
Unlike you, I am not young enough to know everything !
Totally Agree,
The got accountants out of financial planning super advice now they are going to get financial planners out of financial planning lol
the lunatics are running the asylum
Start early in your education pursuits. It’s not the end of the world. You may even enjoy the study and learn some new things.
Exactly TJ! This whole debate about education standards has taken so long to come to fruition that in that time frame, I went and completed a degree (studying externally while still taking care of my clients and business).
So what !
The Government is building a industry of academics that wont be able to articulate their knowledge for clients to make a informed decesion
I have to agree in part.
This might be groundbreaking to some but like every other profession it is possible to be educated AND have soft skills.
I am also an accountant and financial planner . What the government is saying is that my University degrees , CPA and FPA membership and 30 years of experience are now worthless so I need to go sit for an exam to re prove myself. OK I will sit the exam and does that make me a better financial planner or more importantly will it improve my clients outcomes and returns? The FPA have failed us.
Im sure with all that behind you, you will have no problem passing the exam which will only take a couple of hours of your time…. Infact, think of all the additional business you’ll get from those that who retire.
The FPA has most definitely failed us… other than taking our money what is their purpose?
The cull begins…
Why all the negative comment guys??? Leaving in 2020 WTF….. just do the work, there is no need to leave an industry just because it tightens up on education, which, lets face it, a lot of advisers have Diploma level only in FS (which is really not adequate), to tighten up an industry that honestly is lacking in its qualifications.
unless of course you’re in your early to mid 60’s and pretty much fed up with the idea of going back to school.
RIDICULOUS. I would accept this if every member of Parliament had a “relevant” degree such as lawyer or economist, but they are often less educated than the older planners with terrific ethics and knowledge who will be forced out
Yep, I’m out in 2020
Now all we need is the same kind of educational requirements for politicians that cover their portfolios, roles and responsibilities, and let’s not forget a code of conduct and behaviour.
looks like my retirement dates have been firmed up
reckon you are not alone…. which is also scary as the experience falls out of our industry which is not good for consumers. academics generally have few soft skills…
Not necessarily. You could move into consulting young Advisers on developing interpersonal skills 🙂 Lord knows the fresh ones will need it more than anyone.