School holidays are over, and for one cohort of students Year 12 officially starts today. It can be a difficult year, and for many kids it can also be a very stressful year. It represents the culmination of more than a decade of schooling; and whether we like it or not, it creates a benchmark against which they’re all assessed for what they want to do next with their education and their careers.
Imagine if one of these kids rocked up to the doors of their chosen university (or other institution) next year and demanded to be let in because, even though they hadn’t actually achieved the necessary formal educational standard, they have 12 years of experience at school.
Of course it counts for something; it’s just that it doesn’t necessarily count towards entering university – this is a situation where experience very clearly is not equal to a formal or “theoretical” education.
Universities and other institutions can, and do, accept students based on their experience rather than on formal academic qualifications; but a kid leaving Year 12 might not get too far arguing the “experience trumps formal education” line. And with good reason.
No substitute
But recently we’ve heard exactly this argument trotted out in the context of the call for higher formal educational standards for financial planners. The argument goes something like: “Theoretical knowledge is no substitute for practical experience and emotional intelligence”.
No one is actually suggesting that a formal education is a substitute for practical experience. They’re not equivalent – it’s not an either/or situation; they’re actually two parts of a larger whole.
The simple truth, even if it is unpalatable to some sections of the industry, is that as soon as possible, a minimum standard of formal education has to become a prerequisite for being part of the financial planning profession. If that means some people are excluded from joining the profession then that’s not only OK, that’s actually the point.
A more complicated issue relates to individuals who do not get over the minimum formal qualification hurdle. Again, as unpalatable as it sounds, those individuals must be required to reach a certain minimum standard, or also face exclusion. The only decisions that need to be made are: what standard; and by when.
Shown the door
And if an individual isn’t prepared to meet the standard then, again as unpalatable as it may be, they must be shown the door. A commitment to formal education – including ongoing education – is a hallmark of a profession and of a professional.
A Parliamentary Joint Committee is currently examining the question of professional, ethical and education standards. The committee will be told that some planners should be exempted from formal educational requirements because of the experience they have gained over many years. The committee should note, but reject, these suggestions.
There can be no acceptance of experience as a straight swap for a formal qualification. And one very good reason for this is that it’s almost impossible to assess the quality and relevance of an individual’s experience.
Even if two people started in the industry on exactly the same day 30 years ago, their experiences since then will have varied widely. How can we compare them? Is one better than the other? Are they equally relevant?
Experience is critical
Experience is absolutely critical to the creation of a well-rounded and competent financial planner. But experience can’t be measured by time alone. And if you can’t measure something you can’t compare it, and you cannot set a meaningful standard.
That’s one of the key advantages a formal educational qualification brings to the party: a national university curriculum, for example, creates a set of common standards, in accordance with an established, accepted and – critically – uniform quality framework.
In practice, an individual cannot always simultaneously gain both experience and gain a formal education. Some can – and they do – but this fact needs to be acknowledged in employment structures and career paths.
Employers in the financial planning space need to accept that education is at least as important a part of a financial planner’s character as experience.
A bright young thing straight out of university or a committed career changer emerging from an educational institution need time to gain experience. An experienced adviser needs time to gain an appropriate educational standard.
Experience simply is not a substitute for a formal education. In the world of an emerging financial profession, all participants must ultimately strive for both.
