With the debate regarding the level of education “qualified advisers” should have ongoing, ifa has learnt that Treasury officials proposed training provided by institutional licensees as the desired minimum education requirement for employees of superannuation funds, banks and insurers.
ifa earlier learnt that Treasury is hosting roundtables to debate the specificities of various parts of the government’s response to the Quality of Advice Review (QAR), including the idea of “qualified advisers” – employees of institutions permitted to provide personal, simple advice.
While Financial Services Minister Stephen Jones earlier floated the possibility of a diploma as the minimum requirement for the new class of advisers, it now appears that this diploma was envisioned as one issued by the institution employing the “qualified adviser”.
“On qualifications, as the name suggests, they will be required to meet a government-mandated education standard,” Jones said in December.
“The exact level of education will be determined in time, but a minimum standard of a diploma may be the right balance to be less onerous than the requirements for professional advisers.”
Speaking with ifa, Lionel Rodrigues, who is an expert adviser on legal, compliance and advice issues for the Association of Independently Owned Financial Professionals (AIOFP), said that members of Treasury came to the table with the idea of internal training.
Rodrigues, who attended the roundtable focused on the role of “qualified advisers” told ifa: “It started off by Treasury having a view that internal licensee training would be obviously advantageous or certainly desirable.”
“Then the topic went around, ‘Well, should we then have formal qualifications?’ That was where it was starting to head, and I think that’s probably fair enough.”
The minimum desirable level of qualification that was settled on, he said, was diploma level – Australian Qualification Framework (AQF) 5.
“They’ve been talking about not charging fees or receiving commissions, etc and the discussion was about having licensee supervision and the recommendation of a minimum education level of AQF5,” Rodrigues said.
According to Rodrigues, there was a sentiment among those present at the roundtable that “AQF5 was reasonable for a product information provider”.
“They would have a level of corporate training, but that could be enhanced by the fact that they would have some formal training consistent with the Australian Qualification Framework,” he said.
This diploma level of education would be broadly in line with the pre-FASEA education requirements outlined in RG 146.
Concerns about the adequacy of RG 146 were raised as far back as the 2014 parliamentary joint committee inquiry into proposals to lift the professional, ethical and education standards in the financial services industry, when the Professional Standards Councils said the introduction of RG 146 had prompted a proliferation of education providers and a “massive flight to the bottom”.
Following the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 passing Parliament, the standard was raised to a minimum of a relevant degree at the AQF 7 level – a bachelor’s degree or higher.
In fact, in his final report, commissioner Kenneth Hayne said that the prevention of poor advice begins with education and training.
“I believe that, as they come into effect, the new education requirements will improve the quality of advice that is given, and improve the way that financial advisers manage the conflicts of interest with which they are faced.”
Rodrigues did, however, caution that the outcomes of the roundtables do not necessarily provide an accurate representation of the draft legislation that will be released for broader consultation, as it still needs to go through the “bureaucratic sausage machine”.
Contacted for comment on the qualification levels, Financial Advice Association Australia (FAAA) chief executive Sarah Abood told ifa: “Our strong position is that there needs to be a minimum legislated education level, which must be commensurate with the level and type of advice given and be able to count towards a full advice degree.”
There has been considerable speculation about the level of education that these “qualified advisers” would need to meet since Minister Jones first announced the creation of this new class of advisers last year.
Speaking with ifa earlier this month, Ben Marshan, founder of Ben Marshan Consulting, said his preference would be that the new class of advisers hit the AQF 7+ level.
“My personal preference would be to see a way that they will probably hit that AQF 7–8 level so that there was a pathway to move them to be holistic if they wanted to over time, but you don’t necessarily have to do everything,” he said.
“Two to four subjects depending on your specialisation, one in financial services, one in professionalism, one or two in the specific knowledge areas you need, seems about right.”
Sorry what? You expect licensees to be Registered Training Agencies now?
They are treating us like fools, they took us to the gallows and now making a total joke of this industry. Why would any young person want to join this circus is beyond belief !!!!
“Our strong position is that there needs to be a minimum legislated education level, which must be commensurate with the level and type of advice given and be able to count towards a full advice degree.”
FAAA is basically saying the advise will be very low so the education can also be low – but real Financial Planners must be so well educated that numbers have reduced to such an extend that the FPA and AFA had to merge.
Just what exactly does the FAAA stand for? Professionalism they said – but in-house product floggers are OK? Please spare me.
The argument (yet again) is flawed. Firstly, the term “qualified adviser” should be removed from the discussion. It is unacceptable to mislead consumers when a fully qualified adviser is known as a ‘relevant provider’ which means very little to the public. Irrespective of the education requirements, which should align with what we’re requesting relevant providers to attain; the term qualified adviser is misleading and should be removed from the narrative.
It WILL be removed. They included it to divert attention away from the more important issues. They will say, “we consulted and we have listened”, meanwhile advisers with actual qualifications will be given additional layers of red tape and the product floggers will be given a free pass to flog product under the disguise of financial advice, with minimal consumer protections. Financial advice and life insurance regulation/legislation in this country is now so ridiculous and currupted it is approaching third world levels of stupidity.
Seems very accurate.
RG146 is back in business!
Looks that way – and who was the Journo who did it in a weekend?
If you ever wondered how Canberra works, this article explains it nicely – enough said.
Hey Ben, you forgot about the Ethics unit. Must be compulsory.
Can’t wait to bring this tidbit to the attention of my clients and any future prospects.
next joke
If you look closely, really close, you will see that Mr Jones is concerned that someone’s going to figure out there is a village missing its idiot.
Uneducated, Unqualified Sales Agents, Selling Single Products, Vertically Owned and All Paid for Via HIDDEN COMMISSIONS.
It really can’t get any more farcical.
REAL ADVISERS MUST BANNED TOGETHER, ADVERTISE TOGETHER AND MAKE THE AUSTRALIAN PUBLIC AWARE OF THIS STUPENDOUSLY MORONIC PRODUCT FLOG PUSH.
What’s fascinating is that the IFA is the only media that provides any reporting of these important issues that will affect the majority of Australians. Where is the ABC, Fairfax Nine etc. Quick to make a headline of advisers and smash us all on the front pages pre / post RC (not to mention the 30 odd suicides), not so quick to headline a corrupt Govt. and Treasury…
The ABC is full of left-wing zealots who think the union funds can do no wrong. As for the others, they have been sucking on the teat of the ‘Compare the Pair’ Industry Fund propaganda for 2 decades.
It seems heaps of money being thrown at the Media with TV Ads at present – so I would reckon they the main stream media will say nothing for fear of losing those revenues$$$$$$$$ – but I could be wrong.
What about the fee for no service? intra fund is so great then let them charge fee for service like the rest of us
Yes, they now seem to be pushing the agenda that having access to Advice is great (but they didn’t didn’t push that agenda during the Royal Commission – hell they lost their toys over Grandfathered Commissions it seemed)?
I now tend to agree – if the client needs advice, the client will know they need advice and if the advice is of any value to the client, then the client will be willing to pay for it.
Seems to me the Trustee (Product Providers) want to provide advice (to retain FUM perhaps) and therefore are willing to take members money to do so?
Seems more in the interests of the Trustee/members than the member?
What could possibly go wrong…..
Wow! so glad I finished my second degree and forked out a chunk of cash to fund it.
And time away from family and work most likely too.
where are the howls of protest from Choice & the so called other “consumer advocates”
Including the super advocacy just funded by the federal government to endorse their own proposals? Disgusting
Mr Kirkland is now at ASIC. The “pathway” works a treat !
Seems to be a system?
Just when I thought QAR couldn’t become more farcical….
history always repeat
Nothing has been learnt
Clueless any of the treasury people at the roundtable ran an Advisor business ( or any business besides being on the public purse) and putting up with all the distributive issues left by the majors??? over the last 10 years
A number of people in Treasury at policy advisor level are in fact ex-financial advisers (and good ones). They are genuinely trying to provide reasoned & rational advice to the legislators. Unfortunately, like all of us, they are battling politics & vested interests.
Vested interests – is that a polite way of saying Corruption? I thought Treasury (Public Servants) were required to act without fear or favour?
Perhaps a good look at Treasury is required? Head of the snake and all that?
I reckon Treasury might be running Industry Super – or helping? Treasury had plenty to say on Conflicts/education/lack of ethics for recommending retail over out performing and cheap Industry Super when it came to AMP and the Banks at the RC?
Given the Fed Parliament outsources the Parliamentary Employees Fund to AusSuper, the conflict appears to run deep.
Does treasury, ASIC and APRA have a competition to see who can be the most ineffective body? All these round tables and committees, and with clear evidence on what they should be doing not a single change has been actioned that improves access to, and the cost of, quality advice for clients. Instead all efforts seem to being going to giving free reign to super funds to provide poor quality, conflicted advice which will be in the best interest of the fund not the member.
That sounds like corruption? No, we call that special interest groups don’t we?
What an abysmal, disgraceful mess Financial Services legislation has become.
If anyone dreamt up a model to make it more unfair to Financial Advisers and more confusing and dangerous for consumers, then this is it.
It has gone from as bad as it possibly could be, to even much worse than that.
It is simply unfathomable how it has arrived at this point.
No surprised to hear this one bit – Treasury run their own rules according to whatever agenda they have going. It’s a disgrace, just vote out Jones & Albo and bring in a Minister that works with the Industry as a whole.
Like the LNP 9 yr tyranny against Advisers led by Frydenberg and his puppets ODwyer and Hume.
That went well hey 🙁
I tend to agree. Can’t vote out the Treasury Officials – but if the Government of the day continue allowing these officials to run what looks like an agenda (eliminating Retail Super and advice with Red Tape and supporting Union Super with “Qualified Advisers” etc)- then they will continue to do it and both parties will continue to receive declining primary votes (but I guess that is what immigration is for).
FAAA – really hard to see how they have helped real Financial Planners.
Providing the Fed Govt eliminates ANNUAL Fee RENEWAL Consent forms, our business is more than happy to train our own vertically integrated tied agency salesforce internally as well. Otherwise QAR should be scrapped.
They won’t let you do that and I would bet money that Treasury are currently working with ASIC to see how they can make the annual fee renewal more complicated than it already is.
Product sales people employed by product providers, qualified by employee standards from the product providing organisation, should not be part of the ASIC Levy for Financial Advisers, they should not have access to Advice related matters through AFCA instead being heard and allocated to Product Providers or the CSOLR for advice matters. They should be named accordingly with Advice nowhere bloody near their title, let alone qualified. Disgusting, from a moronic government which has driven Australian Financial Advice to be a joke compared to any developed country in the world. No wonder the numbers keep dropping.