Compulsory tertiary qualifications and a “professional year” will be among requirements for all new entrants to financial planning from 2015 under a new set of “education expectations” released by the Financial Planning Association of Australia (FPA).

The chief executive of the FPA, Jo-Anne Bloch, told the FPA’s 2009 National Conference in Melbourne that it is clear that FPA members are unhappy with the current industry entry standards.

“There was one thing, though, that remained a difficult issue: The education standards for financial planners and the fact that RG146 has really frustrated planners, and it’s been a source of much concern,” Bloch said.

“The standard for RG146 applies across the entire sector, but for financial planning it has given us too low a base.”

Bloch said government and industry have been “dancing around this issue for too long”.

“Members are frustrated that too many authorised representatives simply complete limited and mandated education requirements described in the current model of RG146, and then they call themselves a financial planner,” Bloch said.

“After some debate and some discussion and the Future Financial Planners Council table, at our various member engagements, at the FPA and all our committees, after much discussion and engagement I am delighted to be able to announce, for consultation, six “education expectations” that we believe will set an education framework for financial planning – for professional financial planning.”

Those expectations are:
1.    That by 2015, all new entrants to financial planning have, as a minimum, a tertiary requirement in financial planning.
2.    That by 2012, a commonly-recognised tertiary curriculum for financial planning based on the Financial Planning Standards Board curriculum topics
3.    That there be an “objective assessment mechanism” that “instils confidence in financial planner entry competence”, developed with ASIC, the Government and the profession
4.    That by 2012, all newly qualified financial planners undertake at least one year of full-time supervised work in client-facing activity following their formal tertiary qualifications, before they can call themselves a “financial planner”
5.    That by 2012 all education programs provide “a clear entry pathway to professional designation”
6.    That by 2011, all continuing professional development (CPD) should include mandatory training in ethics.

The FPA has called on all licensees to “dedicate resources and attention to the supervision of CPD to ensure it focuses on professional alignment, rather than simply compliance with RG146”.

Bloch said the FPA was considering making these education standards a minimum condition of FPA membership

“These expectations set out what the board believes should be the appropriate education standards for financial planners – but this is a consultation paper; we do need to work with the education community, we do need to work with the industry and to that extent we will also set up an education council next year, to discuss these objectives and to work through some of the implications.

“For example, one of the implications – and I can hear some of you asking the question already – is what if I don’t have a degree at the moment? Can I assure you that the board is very focused on new entrants from 2015 and has left open for debate and discussion what an appropriate mechanism is for those existing financial planners particularly those who have already met with Financial Services Reform requirements and particularly for those Certified Financial Planners who have met with fairly rigourous standards already.

“You would also appreciate that this is a natural step in the education framework that the board commenced some years ago when the board agreed to a tertiary minimum requirement for the Certified Financial Planner mark.

“We believe this consultation paper will foster another robust debate, and we look forward to visionary and innovative input.

“We’ve long been talking about education and RG 146 and now is the time that we put the stakes in the ground and we make some progress.”

To make a comment on this article, please click below. If you are a registered user of the Professional Planner website, please log in to the website before leaving your comment.

Join the discussion