In her address to the ASIC Annual Forum on Monday, Ms O’Dwyer explained that under FASEA’s proposal all advisers, including those with a relevant degree, will be required to undertake some amount of education in order to be appropriately qualified.
“Advisers who have not previously undertaken a degree, or who have undertaken a degree that is not in a related field will need to reach degree-equivalent status,” Ms O’Dwyer said.
“And advisers who have previously completed a degree in a relevant discipline will need to complete between one and three bridging courses, to bring them up to date with current ethical and professional standards.”
Ms O’Dwyer said the education reforms were a necessary step towards rebuilding trust and confidence in the financial services system.
“It is important to remember why these reforms are necessary – repeated instances of inappropriate or just plain bad advice has significantly eroded trust and confidence in the financial advice sector,” she said.
“Every adviser has a role to play in rebuilding that trust, and these new educational requirements are a critical step towards professionalising the sector.”
Following Ms O’Dwyer’s remarks, FASEA today issued an update to its guidance on education pathways and code of ethics, which confirmed that all advisers will need to do at least one bridging course unit.
The update also confirmed that the 10-year rule, which would require advisers with degrees older than a decade to acquire a new degree, will not be part of the regime.
FASEA also opened submissions for both the proposed education standards and the new code of ethics.
Speaking at the ifa Business Strategy Day in Melbourne this morning, lawyer and compliance consultant Sean Graham of Assured Support reflected on today’s announcement.
“The government has a very aggressive, reformist approach to financial advice,” he said.
Simple solution from a simple woman with little life experience of business
she’s got no bloody idea…!!
As someone who’s relatively young and working within the industry in a supporting role (and studying with the goal of becoming an adviser).. the Government’s apparent contempt towards advisers/the industry and the continued uncertainty around FASEA is honestly terrifying. And the fact that FPA’s advocacy for members/the industry has been dismal compounds this.
What I learn within the confines of a classroom or lecture theatre pale in comparison to what I learn in my place of work. My boss is great and extremely supportive – but with these changes will have to juggle his already large workload, family life and now additional study. This will considerably reduce the time he has available to actively mentor myself and my fellow colleagues – and we will be poorer for it.
The predicted loss of existing advisers (and their years of experience/knowledge) will have a huge impact upon individuals like myself. Those that remain will have little to no time to act as mentors, and the vacuum caused by those exiting could see newly qualified, inexperienced advisers (like myself) filling these holes and finding ourselves completely out of our depths.
I’m not sure what the future holds, but it’ll be one hell of a ride.
Now is the time fore the AFA to stand up on behalf of their members. AFA needs to get down and dirty with Minister Kelly O’Dwyer, They must drive the message home hard that the volume of advisers ready to leave this industry because of FAESA education requirements. Does she really understand our industry. NO she does not. Please AFA stand up and be there for your loyal members.
What’s going on with FASEA. One day it’s financial planning degrees for all, the next day 10 year rule gets watered down, and day 3 existing relevant degrees are ok. So does anyone who recently enrolled in a Degree or Diploma get a refund? Very Frustrating.
This is where an association that represents the needs of planners could quite easily stand up right and drive home some very valid points and say look at what we’ve got to deal with. However the FPA are silent. It’s clear it’s because of the relationship with the banks and they’re in the middle of a royal commission and all is silent.
Having spoken to my Fed MP who said that it was the FPA AFA et al who rolled over to O’Dwyer and it was only these same bodies who can make her change her mind, we are in a bit of a pickle. She is, apparently, open to change if it comes from this quarter and bugger the rest of the complaints.
I also spoke to Phil Kewin who said the AFA were going back to the Minister and to FASEA to point out the issues created by the Minister and FASEA. Also, to provide some alternatives that could actually work. I felt heard and heartened that some others have done the same – contacted him. We need All concerned advisers to do this.
I encourage each of you to do three things : talk to your Fed MP personally. Write to the Minister. Talk to your representative body at the highest level. Give alternative ideas here rather than bash. change is inevitable… anger and frustration is understandable… yet it is VISION that is required here. As advisers we have the real vision necessary as we have collective experience of the good and bad in our industry and most of us have seen the bad apples. AFSL’s need to sharpen up and weed out poor advisers – those whose advice is poor. Surely that is achievable?
The problem is that the “eroded trust and confidence in the financial advice sector” has come about by legislation such as LIF which implies that those in the Industry are all crooks and nothing could be further from the truth. “To better align the interests of all parties” has become nothing more than shafting advisers that genuinely look after their clients. Who will fill the void? Who will provide the necessary advice? and who will look after the widows and children?
I can see and feel the anger growing! I am so glad to be out of that industry….retirement is bliss! If you are near retirement, just leave, enjoy life.
O’Dwyer is totally insane. The worst ethics we see are from her and her fellow politicians and from her and her cronies on the boards of the banks and insurers. If the politicians had to take a degree in ethics (or even a relevant degree) they would all be out of a job. The loss of ” consumer trust” as she puts it and scandals have been predominantly caused by the instos of whom the senior execs and the main perpetrators will have no further education requirements. Clearly planned to create her next job post politics so she doesn’t have to complete any further education no doubt.
Sadly the people that need to read all of the comments about what is likely to happen to our once great industry will not even look at the comments. What we need is an Industry body with some political clout to make it clear to Minister O’dwyer and ASIC that Education will NOT solve the dodgy advice problem, its about weeding out the bad apples in the barrel this can be done by not allowing a bad adviser to go from group to group.
“It is important to remember why these reforms are necessary – repeated instances of inappropriate or just plain bad advice has significantly eroded trust and confidence in the financial advice sector,” she said.
“Every adviser has a role to play in rebuilding that trust, and these new educational requirements are a critical step towards professionalising the sector.” so says Kelly O’Dwyer
What a heap of crap. As an adviser, I would like to see steps put in place to see standards of professional conduct for our tax payer funded government officials put in place. as I’ve asked before … How did we let this happen? More importantly, how can we turn this BS around?
we can all go on strike..?
disrupt the financial services sector..?
Ms O’Dwyer has never run a business or actually has spent the time to actually understand our industry. I hate the presumption that all they think is that having a few letters after your name somehow makes you better than an adviser with 20 years experience.. this is madness. The end result will be the creation of yet another industry (education), increased costs and the end consumer ends up paying more… now that is a good outcome?!
So does this mean she will be getting a related degree to hold her position too? Oh what was I thinking…
No I think the industry will be better off. Once all the “dead wood” is culled (including me) the industry will be full of fresh faced young and enthusiastic and well meaning people.
The fact they’ll have no idea what it means to run a professional practice, how to manage staff and clients and have no-one to mentor them to be better than already are is obviously not a concern for the Government.
I have a an undergrad (non related) and a Masters that includes behavioral finance, share market analysis, technical analysis, economics, accounting and finance but I have been told it’s “not a related degree”, but it was at a Masters level!!
If this this doesn’t change, after 12 years of education post high school at degree or higher, I am off. See you later, I’ve had enough of your FDS crap, opt In, AML blah blah blah
My clients will suffer and any planners I could have mentored to be better planners will also be worse off.
O’Dwyer has totally lost the plot.
And to be lectured on ethics from a politician!!!!! If it wasn’t so unjust, ignorant and stupid it would actually be funny.
I just don’t get the stubbornness and what O’Dwyer is trying to achieve. What aren’t I understanding here???
Is she trying to destroy the industry and push advisers out of the industry? If so, why? And who’s meant to service the already massive underinsurance problem when the exodus occurs??
I just don’t understand the absurdity of what’s happening here.
[i]Is she trying to destroy the industry and push advisers out of the industry?
[/i]Yes.
[i]If so, why?
[/i]So consumers have less access to professional advice, and product companies can dupe consumers into buying their high margin junk products via direct channels.
[i]And who’s meant to service the already massive underinsurance problem when the exodus occurs?
[/i]Junk insurance.
Like all Politicians.. too stubborn to realise that they may actually might be wrong. I give it to them though.. masters of creating red tape and industries within industries (paraplanning, compliance.. now education). The average punter will simply pay more for advice.. now that it a good outcome…right?
Yes, she is
The correlation between quality of advice and education is a small part of the equation. Experience is a huge component. Perusing the levels of education mentioned will unfortunately result in our Industry imploding. Where’s the “better alignment of all parties interests” then.
There are thousands of well educated individuals who cannot get a job. Time to reassess the realty of the situation for the benefit of the consumer.
Sounds good but the reality is otherwise. The correlation is very high between quality advice and what the individual professional has at stake in terms of the time and cost of a degree, post grad qualifications and a membership. Well credentialed advice professionals are very careful with all sorts of risk as they understand the issues. Very few qualified Advisers are unemployed.
Do these employed “qualified” advisers run their own businesses and accept the associated risks or do they hide behind a licensee (as an employee) that spoon feeds them with so called “leads” which in most cases is part of a product forcing regime. No responsibility for your actions equals poor advice and the reason we are in this mess. Soon someone will be advocating that as long as a Formula 1 driver has a degree he or she will be far better at doing their job than someone with years of experience.
Not saying that being qualified completely beats experience but being both qualified and experienced is ideal! And its not hard…
Rethink – it is the instos with their layers of management that have not been taken to task, only then will the confidence be gained. to single out rouge advisers is only part of the answer. This aspect is obviously toooooo hard to address because then the confidence in instos will be eroded. Bandaids do not fix this issue so O’dwyer herself needs to address the situation.
It’s the conflicted institutions giving the poor advice and ASIC has not done its job effectively over the years – it has let the Australian public down. You haven’t given enough time to allow Opt In and fee disclosure notices to empower clients and instil confidence and trust – instead you’ve undermined their confidence again by suggesting that almost every adviser in Australia is not qualified to advise. The Australian Government should be embarrassed by their incompetence and I expect there will be commentary in many years time that reflects on how these new measures have not resolved the underlying issues. Shame.
The funny thing is the client who has a good adviser. The whole industry is rubbish except for their adviser.
Case closed.
This industry is not progressing, it is self imploding.
While I’m all in favour of setting minimum education standards, the suggestion that education is the solution to the problem of improper advice beggars belief! Education doesn’t provide a moral compass. Our prisons contain an awful lot of people with university degrees and higher!
I’ve been saying that for years Wayne! It is in many cases the most educated that manipulate the system.
O’Dwyer clearly has no sense of reality and the damage she’s imposing on this industry. Talk about taking a sledgehammer to a mosquito!
Alas education creates a more sophisticated criminal.
Dear Ms ODwyer, In relation to your political performance and of all politicians.
[i]”It is important to remember why reforms are necessary – repeated instances of inappropriate or just plain bad POLITICS has significantly eroded trust and confidence in the GOVERNMENT sector.
Every POLITICIAN has a role to play in rebuilding that trust, and new educational requirements are a critical step towards professionalising the sector.”[/i]
ODwyer – please take yourself and ALL your political mates off to do an Ethics course plus 2 other course, to re-educate yourself properly. Sorry your past Law degree is not enough and your arrogance clearly shows your lack of ethics.
Just how will this stop instos telling their employed staff how to pursue bonuses and work around the system until they are sacrificed and the next lamb to the slaughter employed to do it all over again?
Education in ethics does not instil ethics.
90% of the problem is the insto employed and aligned advisers. The other 10% comprises rogues who often don’t even have a licence and the odd bad apple. What happened to targeted solutions? This is just a scatter gun effort hoping to hit something.
Until the government puts someone in charge who has not been employed by an insto in their past life they will be dogged with the some overlying shadow. Sinodonis, O’Dwyer, NAB alumni generally. Malcolm & Goldman Sachs. Bring someone to the table with no insto alignment. They lost Corey Bernardi. Made a few others scape goats. Totally disenfranchised Morrison with his constituency. Do they have no one left with any credibility?
Financial advise isn’t about how many degrees one has, its about working with your client for the best outcome. The client wont come to you because of degrees or letters necessary after your name. they will come to you because of your experience and time in the industry
Thank you Mary. That’s exactly how my clients feel.
So let us be clear – any submissions will be a total waste of time. O’Dwyer has already decided the issue and Dean Sanders has said the same during the SMSF conference.
Why are they asking for input if this is the case or is it just around how much they can charge for the unnecessary courses?
She’s a stubborn bulldog! Always has been. She’s not interested in facts nor was she with the LIF submissions. First time in 30 years I won’t vote Liberal – not while she’s managing this portfolio
I would love the education standards to including those work in government departments and politicians with a relevant degree, will be required to undertake some amount of education in order to be appropriately qualified. instead they waste so much money take the best people in the financial sectors and watch what the country could be I can tell you their would be taxing our retirees and encouraging people to put money into super.
The government don’t want people to be on support centrelink benefits but removed larger contribution caps for people to put more into super and 01 July 2017 they then put back on 15% tax on earnings for TTR clients oh and you can’t have too much super either or we will tax you more as well.
Government read this…. Something will have to give eventually you can’t have it all ways….