The Association of Financial Advisers (AFA) welcomes the call for the establishment of an Independent Council on education, ethics and professional standards (the Council), as proposed in the PJC recommendations.
General Manager, Member Services, Partnerships and Campus AFA, Nick Hakes says the composition of the members of the Council will be crucial in setting the future course of adviser-focused education and the Council needs to embrace the connection between academic theory and real world application.
“The formation of the proposed Council is a significant opportunity to connect new thinking to our emerging profession,” Mr Hakes says. “Education is the sleeping giant of this decade of reform and will touch not only existing advisers but also the next generation.”
It is therefore crucial to get the reform balance right, he says. “If the education water mark rises too high, too soon and as a result advisers exit the industry prematurely, then who will be left to pass down the skills to the next generation of financial advisers?”
Mr Hakes argues there will be a gap between the new minimum required education standard and the aspirational benchmark that the profession chooses to set itself.
“The finish line for the new education standards is being proposed for 2019 which does not leave long to start the journey. Education takes time and it is supposed to be challenging. The key message as we look into the start of 2016 is – start now.”
Mr Hakes also says financial education reform will involve connecting a psychological approach with practical application. A prime example is the introduction of finology – a developing discipline covering the study of minds, customs and behaviours with respect to money.
“This is the reason we had PortfolioConstruction Forum’s Chief Finology Officer, Dr David Lazenby give a finology perspective at the AFA National Adviser Conference in Cairns last month,” he said. “Dr Lazenby is a licensed psychologist with a PhD in counselling and performance psychology who consults to financial advice practices in the US. He’s also a qualified financial adviser who reflects on how to continually refine the financial advice experience for clients.”
While the science of economics has developed over the last few hundred years, Mr Hakes says approaching financial advice from a consumer’s perspective and supporting it with a psychological approach, is only now getting started.
“Post-graduate education with practical application underpins the education philosophy of tomorrow. We call it applied practice development but ultimately it is about tapping into the diverse range of academic disciplines and connecting them in practice to create rewarding financial advice experiences,” he says.
Enrolments for the first semester intakes for the Fellow Chartered Financial Practioner (FChFP) of 2016 are now open.
