What we can learn from nurses
The story of nursing education and regulation offers some wisdom for financial advisers trying to navigate the forced professional standards mess.
Financial advisers have long advocated for better education standards. I think we all want to see those fly-by "quick accreditation" courses gone for good.
I was recently talking to a colleague of mine, telling him how FASEA legislation is forcing advisers to prove their past education is an "approved qualification" or they must go back to university. He replied by saying "jeez, this sounds a lot like what we had to do as nurses back in the 1980s".
And so I decided to look into this further, as it is a precedent nevertheless. Plus, no doubt many of those who know me will tell you of my interest in public health.
So the story goes: in early 1976 the government commissioned a report (the Sax Report) to look into the nursing sector.
The report concluded there were problems with hospital-based training, with variations of quality of nurse education. The report recommended huge changes to how nurses are to be educated and ultimately it was decided that education must be transferred to the tertiary sector.
This report signalled to nurses that a new education framework was going to come about, but it didn't upset them too much because they wanted this. You see, the standard of care was different from hospital to hospital so nurses found it frustrating to move jobs, learn skills, etc. A stream-lined approach was needed. But they also didn't want to pay for their education.
After much debating, lobbying and uncertainty, a consensus was reached on education of registered nurses at tertiary levels. The legislation to enable the transfer to university-based training passed on 24 August 1984.
The transfer was staggered across 1985-1993, with each state setting its own time-table. By 1994, all registered nursing education was located in the universities as an undergraduate degree.
It was agreed that nursing tertiary education expenses would be met by governments. This was a direct result of a huge amount of honest, tough and determined advocacy by nursing bodies and stakeholders to ensure the feasibility of the legislation. The government Senate reports also recognised that the economic cost to individual nurses and universities would be huge. After all, you are sending everyone without a tertiary degree back to university in bulk.
And so it was agreed that the funding of nursing in higher education was shared by the state and territory governments (75 per cent) and the Commonwealth (25 per cent).
Universities ended up getting lots of money to develop courses, expand facilities, train new staff, and students got their education without the financial burden. Things changed in 1994 and beyond as universities moved to the "Relative Funding Model", which basically meant that universities received government grants, as well as charge students to remain sustainable. As for nurses, their degrees became Commonwealth Supported Placements (heavily subsidised).
Some interesting points to observe is that universities initially argued for a four-year bachelor's course, which is of course good from an education point of view, but was turned down due to the economics being too expensive. Faced with the reality their request was not going to be entertained, they then agreed the bachelor's would be three years.
Care guidelines change according to advances in medical practices and technology, so the education went from 1,000 hours to 1,200 hours in a three-year education period.
To future-proof the quality of education, a huge part was to be dedicated to the use of technology and best practice processes to equip nurses with the rapid changes in medical technology, monitoring and testing of patients. Essentially, the courses were designed with technology and patient care in mind.
According to government data, a decline in nurses was recorded to be 5,893 nurses between 1994-2000 and the reason given is "likely to be due, at least in part, to the drop in numbers of hospital-based training nurses upgrading their qualifications".
This was problematic, and further influenced the government policy to keep subsidising the nursing degrees to attract newcomers.
Here are some very interesting points that we can learn from:
- Nurses were given five years "heads up" to pursue qualifications;
- From initiation of the transition up to 1994, the governments met the costs of the transition;
- From 1 January 1994, the Commonwealth assumed responsibility for full public funding for tertiary nursing education and started to require student contribution at subsidised rates;
- For registered nurses, a three-year bachelor or postgraduate degree in nursing (or the equivalent) is usually required. Universities initially argued for a four-year degree; and
- There are three tiers to nursing, and those with the most responsibility are required to have the highest education. Some nurses are not happy with this as it created "classes" and "divisions" within the nursing profession.
The changes made nursing a much better profession, and resulted in stream-lined, quality education you can trust with your young child's life.
In any case, like nurses it is set that we are being forced to get more education, but unlike nurses, adviser education at a tertiary level seems to be a point of contention and uncertainty. Remembering the issue with nurses is the vast majority of nurses held practicing certificates only and have not undertaken tertiary education (kind of like your RG146 six-month course).
At this point, there are three pathways between now and 2024:
- You do a 24-subject bachelor's degree over three years full time (or six years part time) at a cost of between $1,000 and $1,700 a subject. You may get credits for DFP (maximum 50 per cent, i.e. four subjects). The total cost will be between $25,000 and $40,000. For those with existing bachelor degrees under 10 years, you may get more credits. Over 10 years, you are out of luck. So if you graduated in 2008, I suggest you run and enrol now;
- You undertake a graduate diploma. A grad diploma of financial planning under the new framework is eight subjects at master's level. I hypothesise that the average cost will be $2,800-$4,000 based on current master subject rates for business schools. Total cost looks to be between $22,000 and $30,000 for eight subjects; and
- You undertake a full master's degree of 12-16 subjects. Just multiply the above cost.
I was asked whether a bachelor's degree will count towards academic credit for a grad diploma. Unfortunately, grad diploma is postgraduate level, bachelor's level subjects should not result in academic credit towards the postgraduate diplomas. I suppose you may get one or two subjects credited due to experience, I am unsure.
Unlike nursing, we will not get government compensation/free/subsidised education, but don't break the piggy bank, it is not legislated yet. Oh wait, yes it is. We are just at the mercy of FASEA board and its members to do the right thing by our folks. Check out my thoughts on the FASEA board here.
I hope the board, being majority academics who know too well the costs of education, will consider the issues for small licensees and businesses, and personal cost to planners. We are not even thinking about the down-time of around 10 hours a week per subject on average. They must approve all relevant tertiary prior learning and stand by the education they taught in the past (note the word tertiary).
For businesses who have always encouraged and paid for education for their advisers, especially boutiques, this will pose a significant cost if absorbed for each licensed staff member. I suppose the big end of town may offer to pay for education as an incentive to attract talent.
So where to from here? Like you, I have no idea, no one is speaking. Not FASEA, not the FPA, not AFA. But I think it's because they also have no idea. It would be good to hear that actually. Even leaders can say "I have no idea, but here are the facts".
Have fun, don't stress. Plan for the future, because failing to plan is planning to fail.
William Johns is managing director of Health and Finance Integrated. He is a Certified Financial Planner and specialises in advising clients with complex health and disability needs.
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