After an opinion piece published on ifa written by Neil Macdonald last November – in which he said advisers will exit the industry in droves if the current requirement for existing advisers with no degree to have an approved qualification by 1 January 2026 is not addressed – he followed that up with another article calling for government to set a “firm date” after which older advisers without relevant qualifications can no longer practise.
On a new episode of the ifa Show, Mr Macdonald said the changes are all about moving the industry towards being a profession.
“… we’ve got some 70-year-olds who are doing their bachelors courses at the moment, or their masters actually. And so they’ve decided to get on with it and do their studies. But it’s really important that this is not about a free kick,” Mr Macdonald explained.
“We’ve been accused of ageism as well: ‘Oh well, it’s just for older people’… no, it’s actually to say, ‘We want to try and be a profession and until everybody’s qualified, we’ll never be seen as a profession by other people.’
“It’s not about whether your skills and your knowledge and your attitude’s there, whether it’s competent or not. It’s about can other people look at that and say: ‘Everybody in that profession is qualified.’”
Mr Macdonald recently backed government’s Education Standards for Financial Advisers policy paper that proposed a pathway that streamlines the minimum education requirements and recognises on-the-job experience for individuals with 10 or more years of full-time experience.
Listen to the full podcast with Mr Macdonald here.
It will be seen as a profession by disconnecting the “products” and “advice”, not simply by having a piece paper to prove you’ve obtained a degree!
If there was an existing correlation between “experience and professionalism” then financial advice would be already be a highly respected profession within the Australian community.
It isn’t.
Name one other profession that doesn’t at least require a Bachelors Degree.
We will never be a Profession whilst we allow business people to interpose themselves between the client and those actually advising. Never.
The legal profession does not allow it and nor does the medical profession allow it. It is not considered “appropriate” in these Professions with all that is at stake – to enable non-Doctors and non-Lawyers, who see an opportunity to make a buck – to in any real sense – own and operate firms in either of these Professions.
There is something “grubby” about allowing them to do so – after all with these Professions code(s) and ethics and duty of care – why would you have it any other way. You cannot leave the provision of such important advice – with all the attendant ramifications if it is done poorly – to a bunch of opportunist rent seeking business people – whose sole motive is return on investment.
Yes and the Legal Profession can charge anything they want, they can charge 50%b commissions and take money from desperate clients needing a payment from a compensation claim, plus they take all their costs. That’s why Insurance premiums are so high now…..
Oh and the Medical Profession, actually you don’t need to be a Doctor to own a Doctors Practice/Surgery, anyone can….just higher the Doctors, you can source them from anywhere around the world, then just run 10 minute consultations and claim all your proceeds from Medicare……no compliance, no red tape..and both these professions can receive free gifts, free conferences, fully paid expenses from “product providers, pharmaceutical companies”. I’ve had a Doctor receive a “car”!
Hmm, “opportunist rent seeking business people”, is that what you call an Adviser who has been a Financial Planner for 32 years? Maybe they don’t have the bit of paper on the wall, but they know their stuff and I’m sick and tired of the bashing Advisers get who don’t have a degree…..
Improving education standards (through making advisers need a degree) has been on the cards for more than 10 years and has been in legislation since 2017. How, in 2022, do we still have people complaining that they don’t have enough time to get a degree by 2026? These advisers could have begun their career after the FOFA reforms started and they would still have more than 10 years experience.
How about the industry and the so-called industry representatives pull together and actually become a profession instead of just slowly moving towards one.
My solution would be:
1. Keep the current timeframe of 2026 for everyone to have a degree
2. Find a way that allows the older advisers (ie those with with more than 20 years experience) to demonstrate their competence (besides saying my clients are happy) without needing to have a degree – then give them an associate degree that allows them to practice for another 5 years.
And it’s not even a full Bachelors Degree that is required…. Despite what many of the whingers have had to say about no recognition for experience, prior learning & CPD there has been. A full degree is 24 units of study versus a Graduate Diploma which is only 8. And you only have to do a full 8 if you hold the absolute minimum of qualifications to get licensed.
So the regulators/FASEA have knocked off two-thirds of a full degree and in some cases three quarters by giving exemptions two subjects in the DipGrad. They couldnt make it any easier if they tried.
A subject runs for around 12 weeks at a go, so even if you only did one subject per semester that represents only 24 weeks out of 52, with plenty of time for work, family & recreation. It’s amazing that people come to us for planning advice & services when many of us seem to unable to plan their way out of a wet paper bag…
A Bachelors Degree is at AQF Level 7, the Grad Cert and Grad Dip are AQF Level 8, much higher and more comprehensive. Check your facts. The Bach Deg can be done over 3 years because they can do 4 subjects a semester (3-4 months), 2 semesters per year, plus most of these people are full time students and straight out of school. They don’t run businesses, work 50+ hours per week, managing their clients expectations, have families. Your arrogance and lack of knowledge is disrespectful. The Grad Cert and Grad Dip are “post graduate degrees……that’s because the people doing them are already qualified with Diploma’s, because that’s all that was available for 25 of the last 32 years I’ve been practising!
2022 and we’re still dragging this out. Consumers still think Advisers are like a fart in an elevator, and ASIC thinks Advisers are like chewing gum on the soles of their shoes. The majority that are against reforms usually start their opinion pieces with “i” and “me” and “I” did this and “I’m” experienced but really won’t be missed at all. It’s that “me” thinking that put every decision they ever made, based around their wallet as their priority. Usually ahead of their peers or public interest that has lead us to a position of such bad regulation and being taken advantage of by some many parties. Yes it’s a mess. Personally, I think those that invested in their education during their careers have a little more “us” about them.
“It’s not about whether your skills and your knowledge and your attitude’s there, whether it’s competent or not. It’s about can other people look at that and say: ‘Everybody in that profession is qualified.’”
I would disagree and say its all about ” your skills and your knowledge and your attitude’
And if you do have that, what does a piece of paper mean?
Lets have a professional industry with 25% of the current people giving advice.
Is that better than what we already have or are we just shuffling chairs and making more problems down the track.
I don’t see a perfect solution but i do see at lot of unemployment, early retirements, rises in the cost of advice, an inability to get advice for the so called perfect world of being professionals.
Hey, maybe people really just want good advice from people that have good skills, knowledge and attitude that they can access and afford and that’s enough.
One further side effect of only 25% advisers left is all the knock on industries that make money from advisers. What will they do now when none buys their service or wants to speak to them ie Associations, BDMS, coaches, back office service providers and the list goes on.
Be careful what you wish for.
What actually needs to be done is to BAN GENERAL ADVICE in the initial sales process of all financial products. Why would anyone go out and jump through all the constantly changing regualtory hoops when anyone can provide “advice” on exactly the same products without any training or compliance and without having to act in the best interests of clients.
This is the real issue. No one really cares if you spent all your nights studying away to get your brand new qualifications, all people want is “Advice”. Treasury, ASIC and Industry Super are well aware of this – which is why they deliver General Advice – paid for via a fee taken from members accounts, with no need for a delivery of service or advice, not FDS, no FASEA, no BID etc. Meanwhile, Financial Planners (typically the only competition to Industry Funds dominance of FUM) have been given every conceivable piece of Red Tape imaginable. Think the Red Tap is really there to help costumers or is it their to help customers stay away from Financial Planners and allow Industry Super and product provides more control of who provides advice to their members (their FUM)?
Serious, get qualified for sure, but don’t kid yourself on being allowed anywhere near the real prize – the majority or Australians and their Super (FUM).
I agree. But in commercial reality and also fairness how can anyone expect someone close to retirement to complete this study – for example – A 56 year old who has led a clean financial planning career with perhaps 6 or 7 more years left in the industry prior to retirement now required to spend time and money to perform those few years.
Grandfathering or whatever you want to call it should not be up for debate – but what should be discussed is what it looks like realistically. 15 years is getting tossed around, why not make it 20 years experience as at 2026. I dont know the answer but what I do know is that expecting someone with a short work life remaining is unfair and non sensical.
Make a damn decision and move on. Then get back to the bigger issue that is way bigger to the above and is rarely addressed to the same level of discussion – The lack of new entrants coming into the Industry to replace the outgoing.
All current Advisers are qualified
You can currently be on the FAR with as little as a 4 unit Diploma course…
But not deliver advice.
I agree with his point of view, it’s a loophole rule which could last decades. I’m a advisor in my mid 30’s, I started advising at age 26, so I technically qualify under the proposed 10 year rule. I went out and got my degree on the back of the old rules to ensure I had a future in the industry. But what if I didn’t? I could work as an adviser with no degree qualification for next 40 years or so (provided the rules didn’t change again) and I would have been holding up the industry being regarded a profession, based on what deems an industry to become a profession.
How relevant is the information in that degree you completed? The rules change so often that a 5 or 10 year old degree is irrelevant in a lot of the information it contained. So you will agree it’s relevant because you have completed CPD and stayed up to date with the changes.
People that have been in the industry (as one day so will you have been) for many years would find most of their original study irrelevant to current times. Whilst I agree that a base level of knowledge is required, I fail to see how you could uphold an outdated degree from 10 years ago for example, meaning someone is qualified and professional over someone that has been working in the industry for 10 years and stayed up to date with the changes as they have occurred.
My point isn’t to argue against base education standards for new entrants, but to highlight that experience trumps degrees. Older advisers entered with the education standards met at the time and have stayed up to date since, only Blind Freddy wouldn’t be able to see how this is preferred over outdated degrees (Which all degrees will become over time without the same continuous study everyone in the industry continues to do).
I appreciate vested interest in education outcomes will continue to push their agenda’s (it’s big money). At the end of the day though I want competence not accolades. I’d prefer a surgeon with 10 years of experience over a recent graduate with three degrees to operate on me any day of the week.
You dont get to be a surgeon with 10 yrs experience without having done the necessary degrees in the first place….
I would prefer a newby surgeon that had studies the most up to date techniques rather than someone who had been “doing it for 30 years” and was just going through the motions.
Yeah I don’t disagree with your point, but the idea of all this is to make our industry a profession and one of the cornerstones of being classed a profession is having all professional in the field having a degree.
I’ve known Neil for a while and I respect his views. But if anyone can find anything in any of the University courses which deals with life insurance concepts, strategy and products in anything other than a dismissive comment, please inform me. Surprisingly, there are still a lot of experienced life risk Specialist still in practice , but not apparently at AMP.
For all these university bits of paper to mean anything to me and my clients I need to be treated as an individual specialist adviser. Better still, I would like to be taken out of the regime that licenses investment advisers and throws everyone into the same basket. That was primarily done after the Wallace Report to make it easy for ASIC to supervise advisers. And if it means I’m no longer be able to call myself a financial advisor then who cares, it’s not the title it’s the quality the advice that matters. And I firmly believe you can’t do both.
There is a place for specific licensing for risk specialists, and for those bright eyed and bushy tailed newcomers, if you want to do risk advice and all the other holistic advice “specialties”, then you’ll need to be licensed for both. Tough!
No other profession where you specialise before knowing something about everything….just saying…
There is no place for risk specialists because by focusing only on risk you are ignoring the clients holistic needs.
So completing the FASEA Exam, an Ethics unit, some level of pre existing study and having over a decade of experience with onging professional development requirement beaing met means you’re still not qualified???
I just got on with it , yes I spent time and money , both very scarce. I did it , not for me, but for the advancement of our industry moving to a profession. I want to play my small part to rid the bad stigma of advisers. I’m unhappy that people want a free kick. They are selfish. They don’t care about the indistry. All I hear is me , me , me . Eg, don’t have time. I don’t have the money. I don’t have to do it because I’m 30 year veteran. Me ,me ,me! Stop thinking about yourselves. Just get on with it.
Some of us got on with it years ago before it was compulsory. We did so because it was the right thing to do. Now we are not only being punished by FASEA’s lack of recognition of prior learning, we are being lectured to by a bunch of born agains who have avoided higher education most their lives and now claim to occupy the high moral ground. How would you feel if your shiny new qualification was deemed worthless in a few years by a corrupt govt agency, and you were told to “just get on with” doing it all again? There are bigger principles in all of this than either individual inconvenience or advancement of the industry.
What did you have ? A Diploma ? Or one of the old CFPs that were handed out like lollies ? An advanced diploma ?
Fact is a related degree or grad diploma is most sensible requirement to provide advice
So if you didn’t have these then I’m not sure what you mean when you say you did your studies. And yes , I also agree 20-30 years experience trumps education however education formal qualifications are a ticket to the game. They are a must do. A
Line in the sand is needed to become a profession. As many have noted , doctors , lawyers , accountants , engineers are ALL degree qualified … to practice without a relevant degree or the grad diploma fin services simply does not pass the pub test
Just do it – Nike
Here we go again…using all kinds or obtuse arguments to water the requirements. When they were first mooted there were all kind of noises about how firm the government was going to be about education…then they delayed and delayed the FASEA exam dates … I suspect the exam is now far easier than it was 2 years ago just go get the remaining adviser through..
Now they water down the the degree requirements and talk about a firm date . The firm date was set years ago and that too had been delayed.
No votes for Labour or Liberal from me and my mates …this after 30+ years of voting Liberal
I really hope the proposed experience loophole doesn’t see the light of day. What a kick in the guts to anyone who’s spent time and money getting on with it, anyone with 9.5 years of experience, part time working parents who don’t qualify on the basis of their part time-ness…….sure, give them 2 units for lengthy experience, but a free pass, NO WAY!!
This mentality of “well I’ve done it” seems to have taken over the Aussie mindset over the last couple of years. It’s a selfish and poorly thought out position. One can only ascertain from this, that you don’t feel as doing the courses/study actually provided any benefit to you apart from being compliant. Which if the case, seems weird you would want to subject others to the same pointless outcome, merely because you did it or had to.
If we really want to be a regarded profession, surely the clients/customers need to feel that it benefits them by being so. Experience and competence trumps doing pointless study. Whilst I agree education standards for new entrants is a fair requirement, posing pointless requirements on people that have been sufficiently and expertly been doing a job for 10 plus years even during times of great upheaval, seems counter to ensuring that the clients get a professional outcome.
Anyone with experience or knowledge of our profession will be acutely aware that the client experience is dictated by soft skills, not degree papers. Yes, it is expected advisers know what they are talking about, making qualified, experienced and compliant advisers have to go and to study to have a piece of paper serves no one. I refuse to believe anyone that can remain in our industry for 10+ years doesn’t know what they are talking about. Between direct experience, CPD, Auditing, client complaints etc, I’ve not seen a convincing case, where the lack or a currently approved degree would make any difference for 10+ experienced people.
It seems to me, people pushing for this, merely want to reduce the competition, which actually makes advice more expensive for the clients we argue this is all in place to benefit, as we can clearly see current adviser numbers mean demand outstrips supply, adding cost pressure,
Give up in the rhetoric and be honest and explain to me, how you believe forcing experienced advisers out of the industry (Which are clearly fulfilling their clients needs) really benefits the client?
If experience doesn’t matter, then all degrees should have an expiry date attached (5 or 10 years), as I know the degrees I completed over 15 years ago in other areas, have no application today without experience and continued study in those areas. Although I would be technically qualified in those fields, I’d be absolutely useless as the information I once knew is outdate or irrelevant.
Praise the lord. This.
Not to say that a person can well be more than well qualified even without a certificate from a university cheers
Neil is quite right to say we will never be seen as a profession until everybody is qualified. But what is an appropriate definition of “qualified”?
The definition used by FASEA is far too restrictive and was designed to funnel more fee paying students into courses associated with FASEA Board Members. We need a better definition of “qualified” which gives greater recognition for the study older advisers have already completed.
100% right. People are fooling themselves to call themselves professionals after a simple degree and working a year on the job. 3 years and a further peer reviewed qualification would start to tick that box.
FASEA applied what the government set down in the legislation as degree or degree-equivalent. They applied recognition for prior experience by only requiring existing advisers to do a Grad Diploma of a maximum 8 units instead of a full degree of 24. How that isnt recognised as a concession to experience is beyond me.