An undergraduate degree and completion of the advanced diploma or equivalent should be the minimum academic entry level for financial planners, writes Jackie Pearson.

There is some good news to come out of ASIC’s review of RG (formerly PS) 146, the regulatory guideline that covers the training of financial product advisers.

The regulator’s preliminary consultations with institutions and industry associations revealed that some of the courses on its training register were, in fact, out of date or failed to meet the minimum requirements set out in the financial services train­ing package.

This revelation seemed to come as a bolt from the blue to ASIC, which is surprising, given industry and consumer representatives have been talking about problems with the register since it was conceived in 1999.

One of the main problems is that there is no requirement to re-register courses once they make it onto the register, and the registered training organisation offering the course is only required to review its content once every five years.

When you think about how quickly the finan­cial marketplace is changing, a five year review just doesn’t seem adequate. ASIC intends to address these problems, either by requiring re-registration of courses every three years or by stipulating that it has the power to review course content at any time. Either proposal would be a step in the right direction.

A Balancing Act

ASIC also plans to reduce the training burden on advisers of Tier 2 products, such as home and contents insurance. This is understandable, given that such advisers probably wouldn’t be expected to have the much broader knowledge needed to advise on Tier 1 products. I just hope it doesn’t set a precedent for any further lowering of training standards.

Current entry requirements for planners are supposed to be the equivalent of a Certificate III or Diploma. Under RG 146, that has translated to the completion of four or five modules of study with open-book exams. Such training may be good enough for sales people but it just doesn’t make the mark as an entry level qualification for a profes­sional adviser.

The imperative for reviewing current training requirements is a fine balancing act between pro­tecting consumers and not overburdening licensees with costly training requirements.

However, any licensee serious about developing long-term client relationships, based around the provision of holistic and professional financial guid­ance, would not be satisfied with ASIC’s current requirements. They are simply not good enough for entry to a real profession.

Paraplanners, trainees and support staff may be able to start assisting clients with a diploma but planners should not be advising their own clients unless they have an undergraduate degree in a relevant field along with the specialist and generic training currently required at Advance Diploma level.

ASIC doesn’t see any need to change its funda­mental approach to training; it only sets a mini­mum standard. It is up to licensees to lead the way in terms of expecting higher levels of qualification and competency from its recruits.

Yes there is a skills shortage and it is very dif­ficult to find good people at the moment but finan­cial planning will never be considered a truly noble profession until it sets a higher entry level than that is required of product sales people.

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