In a statement last week, Financial Services Minister Stephen Jones announced that the government will introduce measures to reform financial adviser education requirements, widening the gate for potential entrants as the profession struggles to keep its numbers above 15,500.
“Under the government’s changes, the proposed education standard will centre around a new requirement to hold a bachelor’s degree or higher in any discipline,” the minister said.
While the degree requirements will be opened up, the minister noted that prospective advisers will still need to meet minimum study requirements in relevant financial concepts “such as finance, economics or accounting”.
Appearing on The ifa Show following the announcement, WT Financial Group chief executive Keith Cullen said this was an important step for a profession that was left “barely treading water” with the sheer lack of incoming talent.
“It is just such a big win for the profession,” Cullen said.
“There’s no path to organic growth in this profession if you can’t actively recruit people, and you can’t actively recruit new people into the profession when you’ve got less than 500 becoming available every year. I mean, that was just insanity.”
However, the announcement has since been met with varying degrees of outrage from the advice profession, voicing concerns about lowering the education standard after years of work to shift public perception of financial advisers following the royal commission.
Even so, Cullen explained that despite the government widening the gate for any degree, the remaining requirements in place will ensure that only those with the necessary knowledge will be able to enter the profession.
“Look, most degrees will have at least one or two of them, but it will be four base units of competency and nearly every economics, nearly every business degree will cover at least three, if not all four of those,” he said.
Having expressed his contempt for the Financial Adviser Standards and Ethics Authority (FASEA) imposed ‘relevant degree’ in the past, Cullen said the announcement was the “most exciting news” he’d heard for a while.
“The best part about the minister’s announcement, obviously, is finally people have woken up and there’s commitment to reform this whole notion of what constitutes a ‘relevant degree’.”
Further to this point, Cullen explained that the government’s latest announcement would finally deliver on what was meant to occur before the establishment of FASEA in 2017.
“This is what it was supposed to be before FASEA became this rogue body that the government lost control of and it ended up creating an esoteric degree and calling that a relevant degree,” he said.
“Where do you think the term relevant came from in the first place? It was supposed to be a degree relevant to financial advising – i.e. finance, economics, accounting, commerce, etc – topped up with some vocational training.
“This is exactly what FASEA was supposed to deliver. Unfortunately, they didn’t. The previous government recognised that. They disbanded the body, but the legacy remained.”
While there have been well-founded concerns about the upcoming election and what it might mean for promised reforms to the advice industry, Cullen said advisers could rest assured knowing that the education reforms were supported by both major parties.
“What the government has announced, what Stephen Jones announced yesterday, is the best news … And the best part about it is that, I was at a dinner that Luke Howarth spoke at last night, this is supported by both sides,” he said.
“So, regardless of who our next minister is, who forms government after the next election, we will hold the blowtorch to them and make them deliver on this.”
In comments to ifa last week, shadow financial services minister Luke Howarth confirmed his support for the reforms, though he also noted his disappointment that it was “another announcement on the eve of an election, with no hope of it being legislated”.
“While I would have to see the detail, I am supportive of making the degree requirements more flexible and getting more advisers into the market,” the shadow minister said at the time.
“Taking this work forward would also be a priority for me as minister.”
To hear more from Keith Cullen, tune in here.
Not sure it will be able to be called a profession with these proposed lower educational standards. A backward step in any hope of being recognised as such.
Are those who stepped up to meet the educational standards going to be compensated for the money and time they expended in meeting them? A real kick in the guts for those who did the right thing, while those who hung around hoping for a relaxation in standards get off scott-free.
You make an interesting point.
However, if the degree was so valuable to you and our profession, and key to your learning, why do you require a refund of the fees you paid? Alternatively, if it wasn’t of great benefit to you and perhaps you learnt very little more than what you already should have known through your work, then maybe a refund should be applicable.
Which one is it?
No only less red tape will
10 years ago we were told that a commerce degree was not good enough to stay in the profession. Then, we waited for a financial planning degree implemented and started that, only to be told to wait for a bridging course to be set up, we again waited and started that. Next, we were told that there might be an experience pathway, so we waited for that. 10 years of uncertainty and it looks like we are back where we started. It really has been a difficult occupation to love at times.
FASEA was an absolute unmitigated disaster.
The board was stacked with ex-consumer based organisation representatives who held strong left wing ideologies that influenced policy and direction.
In addition, ASIC were in regular contact with FASEA in relation to the Code of Ethics submissions and formation attempting to subliminally influence outcomes by providing ” guidance ” around specific wording.
And then ASIC paid 2 academics from Griffith University to submit a paper to FASEA heavily based around consumer rights and criticising Financial Advice providers.
Simply and entirely wrong and ineffective on every single level.
And they say the “Deep State” does not exist?