Speaking to Risk Adviser, Bombora Advice managing director Wayne Handley said that in a submission responding to draft legislation designed to improve the professional standards of advisers, he has called on the government to recognise that risk specialists need to be looked at differently from financial planners.
“We need to apply the law of logic and common sense, and I think it is high time that we now recognise specialist endeavours and the consumer are aware of the competency of the individual they are speaking to,” Mr Handley said.
“What we need is separate designations for specialists within the sector, just like you would see in the accounting or legal professions.
“[That way] professionals are identified in their area of expertise and the consumer is aware of that,” he said.
Mr Handley acknowledged the need for professional standards to improve, stating that the current entry level is “not high enough”.
“We certainly agree with lifting the professional standards at entry level, we are absolutely in support of that,” he said.
“But for people who have been in the business and have track records of providing quality advice, there has to be a common sense approach to that.”
In a separate submission, Synchron director Don Trapnell said he had urged the government to include “streamlined education pathways” for differing advice professionals in the draft legislation.
“It is presupposed by government that financial planners and risk writers are in the same discipline, but they are not,” Mr Trapnell said.
“In our letter, we reflect our long-held belief that there needs to be a separation of disciplines in the education and training of financial advice practitioners.”
Mr Trapnell added that he has concerns – similar to those of the AFA – regarding the need for long-serving advisers to undertake further study to meet the new standards.
“There are very senior, very respected advisers within our Synchron group, including myself, who despite their many years of experience and varied qualifications will be forced to undertake a university degree in order to continue practising,” Mr Trapnell said.
“Like many other experienced risk advisers, I hold formal life insurance qualifications, including Certified Insurance Professional by ANZIIF. Given my life insurance qualifications, level of experience and expertise, why should I and risk advisers like me have to re-train? There needs to be a more practical pathway established for existing advisers.”
Well…. back in my day, if you were a risk adviser but were also giving investment advice of superannuation plans, then yo had to get suitably qualified.
Most advisers were ‘forced’ into completing all 8 units to be Adv DFP certified.
That was back in 1994 and yet it is still being talked about today. Seems this industry hasn’t moved very far after 20 + years.
Education was touted so we could all be recognised as professionals was the pitch. And yet today, less than 20% of the population seek out professionals to help them with their planning. Something is wrong with this picture.
Vested interests, I dare say, have manipulated the industry and the governments and consumer advocates all the way through. And who has been the bunny and borne the brunt of the legal end of the stick? The adviser! Risk or Investment – doesn’t matter.
The life companies and the banks despite their well documented mal-practices have controlled the end game.Today, it is squeeze out the older people and make way for fresh young meat to train and discipline with the ‘need’ for education.
But this freshly ground and educated meat comes with one HUGE failure. Sales ability. Empathy. Understanding. Asking the hard questions. Telling stories. Experience. Asking the client to sign and pay for an intangible product or service.
The old days of throwing anything against the wall and seeing what sticks isn’t over. Its just younger and better educated.
There are many well educated people working at McDonalds. (not that there’s anything wrong with that! (yuck!!!) There’s many home delivering pizzas. Get a good education, but get a car and you can deliver for the local pizza shop.
You might even qualify to talk about life insurance and retirement investing.
Good luck with that!
But an oncologist is still a doctor, just as a risk specialist is still a financial adviser
While I disagree there is another aspect to consider. I have completed a Post Graduate Diploma and finished 4 units short of attaining my Masters. Why? Because I am a riskie and there was nothing relevant to my day to day work as a risk specialist for me to study in the remaining 4 units. It was purely advanced mathematics (which I enjoy) and investment streams. There is no degree equivalent for risk advisers. I agree that a base level of knowledge and qualifications is required, however you do not need an accounting degree or similar if you plan on being a risk specialist. A base level such as the baasic Diploma or Advanced Diploma would be sufficient. If they want risk specialists to have degree level qualifications, well they better ensure there are risk streams available to that standard!
I agree, and to take it a step further, even if you don’t offer both services to clients, one must understand the impact your advice on one will have on the other. Imagine a risk adviser proposing protection and funding strategies with no regard to the consequences of an individuals cash position, super balance and net wealth, or visa versa, someone advising on super and retirement planning with no consideration for the impact on risk strategies (funding and protection). If you have to advise clients on how ‘strategy a’ could effect ‘strategy b’, you simply must be qualified to advise in both – otherwise we’ll have advisers advising on only one small piece of the puzzle regardless of the impact on the other pieces.
I really wish people would stop saying this. Financial planning and risk advice are NOT separate disciplines at all! Some financial planners elect not to offer risk advice and some risk specialists offer no services other than risk. However, a significant number of advisers, myself included, do both and, therefore, to attempt to make a distinction between the two with respect to the soon-to-be introduced higher education requirements is irrelevant. What we DO need is appropriate recognition of prior learning and experience. That suits ALL advisers, irrespective of the services they offer their clients.