There’s two things in life they say you should never let people see how you make: laws and sausages. While the processes may be equally unedifying, sausages are almost always more appetising.
Last Friday in Melbourne Julian Sheezel, the chief of staff for Assistant Treasurer Kelly O’Dwyer, attended the June meeting of the Financial Planning Academics Forum (FPAF) to give an update on the development of education and professional standards for financial planners.
His explanation of the latest draft legislation, and specifically the delay in the deadline for existing planners to meet higher standards, was concise and clarified a number of key points, but it also left the academics in the room scratching their heads as to the real reason that a deadline for existing planners to meet new education standards has been pushed out to 2024. From that date, all existing planners will need to have degree or degree-equivalent qualifications.
Sheezel said there are no courses currently available for existing financial planners to upgrade their qualifications to a degree or degree-equivalent standard (meeting Australian Qualifications Framework (AQF) level 7 requirements – see below for a guide to AQF levels).
What he said was: “The current educational requirements require financial advisers to hold at least a diploma-level qualification, which equates to AQF5.”
“Because there is already an advanced-diploma-level qualification for advisers, which is at AQF6 level, the courses that would allow an adviser to move from AQF5 to AQF6 are currently available in the market,” he said.
“The courses that will enable advisers to move from advanced-diploma level, or AQF6, to degree-equivalent status, which is AQF7 level, are yet to be developed. The revised commencement dates and dates for meeting the new requirements have been extended with this in mind.”
What needs to happen next
Sheezel said draft legislation on education and professional standards needs to be passed (he said a re-elected Turnbull government will introduce the bill this year); a standards body proposed in that legislation needs to be set up; and then the standards body needs to develop the necessary courses – and that’s why the deadline has been extended to 2024.
But all of the work to create AQF7-level courses has already been done, and it underpins the financial planning degrees that all new entrants to financial planning be required to have from 2019. The same work already provides a framework for creating pathways to AQF7-level qualifications.
This work has been done by the Financial Planning Education Council (FPEC), and financial planning degree and master’s courses are now offered by 14 institutions around the country.
Sheezel was asked: “If your office, or Kelly’s office, could be convinced that [FPEC’s work] was at least a good starting point, could … the three years [it will take] to build those programs … be whittled down to one [year] or six months or even one week?”
There was a sense in the room that yes, it could, and indeed O’Dwyer’s predecessor, Josh Frydenberg had already acknowledged that possibility.
What’s going on?
That’s why the government’s decision to push out the deadline to more than seven years from now is viewed with puzzlement, and as possibly a diversion from some other motivation – for example, ensuring that advisers nearing the end of their careers need not bother upgrading their qualifications at all, and can continue to operate as usual, underqualified, until they sell their businesses and/or retire.
There’s no particular practical reason that the proposed standards body should need to replicate the work FPEC has already done; no justification for the cost that would entail; and no obvious justification for pushing the deadline out to 2024.
Some formal acknowledgement of existing planners’ experience – called “recognised prior learning”, or RPL – is required, and the standards body, once it is created and resourced, has a role to play in that.
But binning or wilfully ignoring FPEC’s work in developing courses to lift existing planners to degree or degree-equivalent qualifications would be a mistake, and cause an unnecessary delay to lifting standards that are aimed at better protecting consumers.
The Australian Qualifications Framework
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