In a new opinion piece published on ifa, Neil Macdonald said advisers will exit the industry in droves if the current requirement for existing advisers with no degree to have an approved qualification by 1 January 2026 is not addressed.
Mr Macdonald said if the requirement is not changed, the next exodus “will make the current stream of exits look like a trickle in percentage terms”.
“There are huge issues with this approach,” Mr Macdonald wrote.
“The first is that many established advisers accepted the challenge to sit the FASEA exam, and have since passed, demonstrating that they knew the answer to ambiguous multiple-choice questions which rarely had much to do with the valued work they do for their clients.
“However, many of these advisers are older, but not old, and see no benefit in enrolling in university to do a degree that will require academic study for the sake of a few more years in the industry; years of pain and red tape.
“The second is the assumption that four years is plenty of time. It is not. A FASEA-approved degree, for someone with no existing tertiary qualifications will take, conservatively, three years full-time to complete.”
It was revealed in September that the total number of advisers in Australia has dropped below 19,000 and in October, ASIC said that transition plans for FASEA to be wound up and responsibilities passed to the regulator in support of the recently passed Better Advice Bill will be announced imminently.
Mr Macdonald continued in his opinion piece that he can recall no other profession where participants who meet the educational requirements are still obliged to complete further tertiary education in order to continue.
“We must not make it impossible for highly-experienced advisers to remain in the industry, just because they can’t or don’t want to complete a degree,” he wrote.
“If we don’t, we will see thousands more highly experienced advisers exit en masse on 31 December 2025, and that can only herald a grave new year.”
Read the full piece here.
Neil, education standards were flagged to be raised in 2012 and again in 2014. The idea was advisers would be more able to provide better advice if they knew more, which is a pretty fair assumption. Leaving aside the fact you are probably just trying to remain relevant for your members, are you really saying that 12 or 14 years is too long a timeframe for people to expect advisers to become more qualified?
As a profession we should be doing as much as we can to educate ourselves so we are in a better position to help our clients, but it seems many want to do the bare minimum and then claim they don’t need it because they learnt everything they needed 20 years ago.
Maybe, what you should be doing is working with your members to help them through this process instead of trying to sweep it under the carpet.
The minimum education pathway to meet the statutory definition of ‘qualified accountant’ or registration as a ‘tax agent’ is DIPLOMA. It would be nice if all advisers held multiple degrees and designations (like me), but lets not pretend that everyone needs to hold a degree for the advice occupation to become a ‘profession’. Accounting is a profession with a minimum education pathway of DIPLOMA.
You sure about that? I’m pretty sure that they may get you into the industry but not be able to act as an accountant and be a member of a professional organisation
Yes i am 100% sure about that. A diploma will get you membership into one of the three professional bodies. Likewise, a diploma remains the minimum pathway for TPB. This means the minimum education pathway to be an accountant remains at this pathetic level.
I have seen many advisers who claim to have lots of experience and feel they will not learn anything from the new courses giving some very old school, out of date advice. Why does the old guard feel so entitled that they can’t learn anything new. They are part of the issue – besides the obvious cowboys. Failing to change with the times (whether we agree with it or not) will continue to ruin our profession’s reputation. All of this bickering is not helpful and no-one should feel more entitled than others to not have to do study. If they had started when it was first announced, they would have finished by now. Stop complaining, hit the books or find a new occupation. the time people are wasting complaining could be used more effectively for educational studies. It’s really simple.
I think certain advisers actually have had 20 years. If they were thinking about the legacy they leave they would have studied, and I’m talking more than a DFP completed decades ago. A lot of those adviser saw a huge amount of Government intervention and so any sensible person would want to prevent that and would have gotten a basic level of education. (more than a Diploma) When I entered the industry 25 years ago, used car salesman were the preferred candidates for adviser roles. I was determined to change that and went out and even more educated. Those advisers moaning are really self centered, don’t care and given I completed a Masters in less than 12 months, really need to leave the industry as soon as possible. They’re just looking embarrassing now.
Well said. These “tough times” are going to create a far far better and more respected industry. Its time for the winging and self pity to stop!
This issue was flagged in 2015. I think this was enough time to start a Grad Dip or Masters as a mature age student.
For me it’s not an issue. Get on board or get out!
Excellent piece NM – this needs to be out there! Problem is that AR’s need to start their studies NOW – to have any chance of completion by Dec 2025. If they can’t see this as a remote possibility, their exit/succession plans will be in concrete by early-mid 2021 – with an imminent exit. Government needs to overturn this legislation urgently..
Excellent work Neil – stating the obvious is not difficult!!
Its about public perception, lets be honest, and we need to improve ours, fact is, a lot of advisers have done dodgy dealings to get us to this point, and now we need the work on reinstalling the public’s faith, its not about what the grad dip will teach us, which really is nothing. I hear so much whinging in this forum, every adviser likes to say “Im a financial adviser”, every adviser likes the recognition of being a professional but seemingly hardly any of us is prepared to do the hard yards to have our profession recognised, lets be honest, if your too old and cant be bothered then its time to hang up your boots. I get how hard it is for everyone, I have 2 young kids, a house half renovated, over 500 clients to look after and started the grad dip with 7 units and I’m working through it, its painful yes, but its about pulling our profession out of the gutter so we can truly be recognised. I’m sick of the argument that “life experience” and “my clients don’t care about my qualifications”, do you hear accountants saying that?. Harden up and get on with it or get out. Simple.
500 clients….how is that possible???
This is written like it’s new information. This has been in place for yonks. All the Advisers at our firm have COMPLETED their Grad Dip and now don’t have to winge or worry.
I am with you Bob. I think some those with less sympathy for us mature advisers are thinking they may pick up clients on the cheap when we are driven out
I don’t think so. Myself I’ve worked in this industry for 25 years and was planning to retire in the next couple of years before these changes. I think you’re not getting the sympathy because others have realized the study was not that hard. Personally as someone wanting to retire myself i think you actually cost me thousands in flooding the business.
Yep me also. I will be 62 and why waste 4 years of my life for a piece of paper (7 units required) that does not prove anything.
25 years of experience counts for nothing. I have sacked a few advisers with degrees, that knew nothing and could not apply their knowledge.
My clients don’t care about my qualification they care how I treat them, the quality of the advice and how they can understand the advice. These are the same clients we have looked after for decades.
Tell me how they will be better off with an adviser with a degree, no life experience and not to mention the change which they will fear.
I am in that situation, now having to wasting months every year to complete these 8 units (post FASEA exam). All it is doing is robbing my clients of access to advice, who cannot believe the Govt is imposing such requirements. It is ridiculous for advisers with over 20 years experience. It is fine for new advisers, but not long serving ones.
Agree there is plenty wrong with getting an adviser with a degree and no life experience.
However, tell me how clients will be worse off with an adviser that has 25 years experience and has done a degree in a range of different subjects in areas they may not have been familiar with.
Time to stop whinging and get on with it. Let’s get the shonks out of the industry!
My situation exactly!
Whilst I despise the Liberal government led assault on the financial advice industry, if you want to advise clients on their hundreds of thousands in retirement savings, then have a degree. It is what the community expects should be the case. These proposed changes have been known for years and have already been pushed back. Enough. Get a relevant degree or get out of the industry.
“be serious, You are not trying – You are whining” – The Devil Wears Prada (2006)
If you want to stay, get on with it and do the study (many already have, as have I). It’s a big deal, yet many things in life are, yet it’s doable for those who really want to stay in the profession. The sooner you start, the sooner you will finish
No one can argue with that. The sooner the self pity and winging stops the sooner we have a better industry. I have been continually staggered by the number of advisers arguing against the changes. If the put as much energy into studying as they do complaining they’d be qualified by now. I bet most of the loudest complainers come from the time when a DPF was included with a box of cornflakes.
These are good points and not to mention the cost of doing the degree which is in addition to the 40 hours CPD (one week!) required annually in addition to the nonsense above. A sensible consultative approach is needed from the Government that unfortunately is not possible with the Hon Jane Hume in the chair of Financial Services.
Disagree with Neil. You can get plenty of recognition of prior learning and it won’t take 3 years full time.
I completed a grad dip, and a masters within 12 months, whilst starting a business, with 3 kids under 5. It can be done, it’s not fun but plausible
Congratulations on doing the hard work, but I have some questions. Did you learn anything of substance from doing the study that you didn’t already know and have already dealt with day to day as a financial planner. Did any of your clients benefit from the thousands of dollars and numerous hours you spent to do the study? Did the study make you a better financial planner?
You ALWAYS learn something from study and if you know a lot of it, then that just makes it easier. I’ll probably finish my studies a year before I retire and yes, it is a pain and yes, I got a couple of units of RPL, but I’ll try to learn something from it and scrape through with a Pass. P’s get Degrees, they say.
Having done a Masters degree. Yes you learn plenty about markets and planning that your less educated superiors or colleagues have no idea about. Clients pay for you knowledge and experiences
Simply put, yes I did. It also made me consider the way I approached advice and I changed a number of things for the better. I honestly believe I am better for it, and as a result so are my clients. I wasn’t really keen on doing it, especially having started a business at the time, BUT I just decided it had to be done, so got it done and could focus on my clients and my business.
That’s not what i am hearing when asking about RPL now from the providers, and i have asked a lot. Which Uni did you go through and what type of RPL credits could you get. All i am getting is we don’t recognise that with what i submit.
Kaplan offers a Grad Dip of 8 units. If you have a Diploma of Financial Planning you can apply for 2 exemptions.
Exactly. The educational requirements have been known now for years, yet many of those whinging will not have even started looking at which provider they’ll use, instead using the time to mope about how unfair life is. They’ll just sit on their hands, like many did with the exam and then whinge some more about there not being enough time to complete the course…