I believe that as an industry we need a baseline standard for adviser conduct and mechanisms for ensuring that. I also personally find value in degree-level studies in terms of developing skills around being able analyse and think critically. That said, however, degrees are not the only way such skills can be developed.
The opinion of the advice community about the need for existing advisers to obtain degree-level qualifications is fairly united in that if they are made to undertake further study then there is no doubt that those approaching retirement would be inclined to ‘take an early mark’ and avoid the hassle of more study altogether.
If that were the case, the effect that would have on the advice community – and their clients in the long run – would be monumental.
Ethical and knowledgeable older advisers provide valuable mentoring to young people entering the industry. And, while we are in a period of change, with some changes long overdue, it would be pertinent to not throw the baby out with the bathwater.
One of the downsides of the recent focus on advisers has no doubt been the impact on legitimate, principled people who, regardless of qualifications, would behave with their clients’ best interests in mind. Mind you, there is certainly no shortage of individuals with degree qualifications who have been found guilty of breaching financial services laws over the years.
In addition, I would say that a degree does not equal a passion for working with people or on an overall empathy for a family’s financial security. The provision of financial services is still a relationship game. You could be as qualified as they come, but yet still lack the necessary drive or ability required to build a relationship with a client and their family.
It is not simply about knowing your products inside and out. It’s about knowing your clients and their family inside and out too.
As with all policy change there will likely be some parts that are less palatable to the adviser community than others. Ultimately at Rando & Associates we engage actively in any industry changes and; are already putting in place plans, regardless of Treasury’s recommendations on the matter so that we are able to provide the same consistent level of service that our clients have come to expect from us.
In regards to industry bodies such as the FPS who have stated that current advisers should not be required to become degree qualified to meet the new standards, I am glad to see these groups have remained strong on the issue of not requiring degree qualifications for existing advisers. Furthermore, this is a move also supported by consumer representative body Choice.
In the meantime, we at Rando & Associates will remain proactive and await to see what Treasury has to say regarding its recommendations relating to new advisers entering the industry.
Mark Rando is the managing director and a senior adviser of advice practice Rando & Associates
I used to work my practice from a divisional office of National Mutual where there were 60 advisers.
One of the most wealthy at the time could tell me how much he was going to earn before he even met the client!
At one appointment, he was told by the clients father who saw him arrive in his new Merc, that he should just drive off because his son couldn’t afford him. He learnt from this to park his car around the corner in future. (as against being proud of his achievements to earn enough to own such a car).
This same person was coached through the education process despite being very poor at learning skills, but because he wrote a lot of “business” he was given special consideration.
The same person still operates 30 years later, fully qualified under the requirements.
Education means nothing and is just a crutch for politicians, companies and advisers to hang their credibility on.
Those who truly serve the best interests of their clients, whether they are educated or not, are the role model to follow.
Getting paid for doing what you enjoy is a bonus. Tarnishing an industry for the sake of self riches is not acceptable.
So please don’t keep throwing further education up as the panacea for the ills of the industry. You just need to root out the weeds in the garden. But then the problem is that the gardener is the insurance and financial industry manufacturers themselves. They need to be employed and fed and will throw any adviser under the bus to save their high paying role.