Financial planning as a profession needs to more clearly map out career paths for new entrants, and sell the benefits of financial planning as a career to potential university graduates, according to leading dealer group and licensee heads.
The Professional Planner Dealer Group Summit, held in the Blue Mountains west of Sydney on Monday and Tuesday this week, heard that mandating an undergraduate degree as a minimum entry qualification pose some specific problems.
Without guidance from the government on how it might implement recommendations of the PJC inquiry into lifting the professional, education and ethical standards of financial planners, leading licensee and dealer group representatives say the industry can only guess at what the recommendations might entail.
“It’s one thing to say we need advisers to have a minimum level of education set at a degree, but what do we want them to know, and by when?” the Summit heard, at a session debriefing a series of small-group discussions.
Professional Planner Dealer Group Summit – photo gallery
“A degree, in what? Studying what? For how long? The outcome of the inquiry so far is there’s been silence on that matter.”
The Summit heard that “absolutely no one” is opposing the idea of a degree as a minimum entry-level qualification.
“A few organisations out there have said we will only accept CFPs,” the Summit heard.
“Had we as an industry done that over the past 20 years, we wouldn’t be having an education conversation. We have all, directly or indirectly, played into that by employing advisers with DFP 1-4. We’ve all done it – hand on heart, directly or indirectly. We need to put our hands up and say OK we did that; but now we’re not going to do that any more.”
A deep dive on qualifications
The Summit heard that the PJC-proposed Financial Professionals’ Education Council (FPEC) – which is different from the current Financial Planning Education Council (also FPEC) – will take “a deep-dive into what AQF 7 means in the context of financial planning”.
“But obviously there’s a chicken-and-egg element to that,” the Summit heard.
“Then there’s an issue around existing advisers. What does transition look like? What does recognition of prior learning look like? What constitutes a relevant degree today in that recognised prior learning? If I’ve got a science degree…what does that mean?”
The Summit heard that it is “incumbent upon us in the industry to sell the profession”.
“Perhaps that starts with the undergraduates as they go into university,” it heard. “Perhaps it starts earlier than that – studying finance at school, at HSC level, prior even to university.
“But…bearing mind we’re gong to have a awful lot of graduates – because that’s going to be a prerequisite to joining the profession – what does it look like? What does the graduate pathway into our business look like?
“You’re not going to graduate and then the next day be put in front of the client and giving them comprehensive statements of advice and tax structures and aged care, estate planning, et cetera. So what does that journey look like and how can we clearly articulate that to the future financial advisers out there – intelligent kids sitting in school today who are the future of our business and the future of our profession?”
“We need to sit down as a profession and map out perhaps with groups like the FPA and the AFA hopefully and especially with the universities, to clearly articulate what that graduate pathway is going to look like, particular for those 21, 22 year olds who are very important.”
Bodies most work together
The Summit also heard calls for existing membership and professional bodies to work more closely together.
“We have clearly way too many players in this space, all representing different interests and all having clearly articulated different goals,” it says.
“Some of us have nailed our flag to one mast or another. Fundamentally the AFA and the FPA and others, whichever side of the fence you’ve landed on, shouldn’t be considered a ‘side of the fence’. There’s been mention of the CPA and CA. They fundamentally, on the whole, get along. We need to force the AFA and the FPA if they’re not – and I know it’s incumbent on the membership – to make sure they do, because one or the other, or both, is going to be our professional body.”
There were also calls for a more considered timetable for implementing the PJC proposals.
“There’s a paper due out and that’s going to be very interesting, and September is the month flagged for when some sort of key action is going to be taken,” the Summit heard.
“What that means we don’t know, because the paper is not out yet. But that’s a very, very, very short timeframe for everyone to get organised in any way, shape or form.
“And it feels a little bit like what happened to us all with FoFA when we all went, so what are we going to do now? And by the way, we’ve all got businesses to run at the same time.”
