Sometimes the printed word doesn’t convey exactly the desired meaning. When that happens it’s never the fault of the reader. It’s the fault of the writer, for knowing what was intended but not being concise or clear enough to get that across.
And so it was with an item on the Professional Planner website last week that quoted the chief executive officer of the Financial Planning Association (FPA), Dante De Gori, saying the FPA would work with the government to see if a financial planner’s Certified Financial Planner (CFP) designation could help them to clear one of the hurdles in proposed new education, professional and ethical standards. As far as it went, that is an accurate reflection of what De Gori had been saying at the FPA’s roadshows around the country.
But in some quarters it was interpreted … no, that is not right, is it? Clearly the story was capable of conveying the meaning that the CFP designation was a) all anyone would need to meet the new requirements; and/or b) a requirement for all financial planners to have in order to meet the new standard.
Neither of those things is right, so in an attempt to set the record straight, it’s worth recapping what De Gori meant when he raised the issue at the roadshows.
In a nutshell, financial planners will be treated as two distinct groups under the proposed legislation. The first group is people who enter the industry after January 1, 2019 (and whose names are not on the ASIC Financial Advisers Register before that date). All new financial planners will need to hold a relevant bachelor’s degree. That’s simple.
The second group is existing financial planners (individuals whose names are on the register as at January 1, 2019), and it’s this cohort De Gori was talking about.
The draft legislation says all existing financial planners must hold a “degree or degree-equivalent” qualification (at AQF7) or higher, on or before January 1, 2024. Initially, it was feared it meant all financial planners would need to obtain a bachelor’s degree by then. They do not – and there’s more than one way to get to an AQF7-level qualification.
Crucial to the assessment of an adviser’s qualifications is so-called recognised prior learning (RPL). All of the courses, exams and other study that a planner has done, over an often lengthy career, will be assessed to see if it can count towards getting them over the line. Enter the CFP designation.
POLL: Will you be required to do additional study to meet the new education requirements?
Might be satisfactory, might not be
De Gori’s point was that elements of the CFP education program are set at a level higher than AQF7. The FPA wants to know if having completed the program could be deemed satisfactory in meeting the new standard. It might be satisfactory, and it might not be. The final decision rests with a so-called standard-setting body, which will be established by the new legislation, to establish and monitor all things educational.
This issue is only relevant for an existing financial planner who does not already hold a “relevant” bachelor’s degree or higher qualification. If you’ve got a relevant (definition TBC) degree, a master’s degree, a PhD, whatever, you’ll be fine – you’ll meet the new standard, end of story. If you do not have a degree but you’re a CFP, the FPA simply wants to know if that might be relevant.
De Gori made no suggestion that anyone must be a CFP to meet the new standard. Even if it wanted to (and it probably does) the FPA cannot impose an industry-wide requirement anyway – it’s a member association, not a regulator. Being a CFP is entirely optional, and in any case it is conditional on being a member of the FPA.
(An issue the standard-setting body will need to consider is what happens when or if a financial planner ceases to be a member of the FPA and loses their CFP designation. Do they suddenly cease to be qualified?)
The independent body will assess the CFP program (and any other programs it is asked by others to assess) to see how it stacks up under the RPL provisions of the legislation.
No one has to be a CFP to meet the new standard.
There’s more than one way to get an AQF7-level qualification without completing a full bachelor’s degree.
And if you’ve already got a relevant degree then you’ll be fine anyway.
Now the only things left to deal with are the issues of the professional year (PY), exam and continuing professional development (CPD). It would be daunting enough, even if everything were straightforward – but legislation is still only a draft, and the standard-setting body charged with overseeing all of this doesn’t exist yet. It might not come into being before June 30.
It’s been said before, and it will be said again: it’s going to be a long rest of the year.
