Certified Financial Planners with qualifications that may be ignored under the new professional standards and education framework are making the loudest noises during a country-wide consultation on the issue; however, talk of a mass exodus among experienced planners is probably overstated.
It’s the advisers whose extensive studies may not be recognised for both obtaining and maintaining their certifications who are most put out by the proposed new standards, Financial Planning Association chief executive Dante De Gori said.
The FPA is live polling participants at its Australia-wide roadshow to discuss compliance under the Financial Adviser Standards and Ethics Authority. There have been about 3000 attendees at the roadshow to date, and 80 per cent have registered agreement with the FPA’s proposals during live polling. The roadshow will culminate with events in Sydney on June 13 and Newcastle on June 15.
“That FASEA is placing recognition of non-financial planning qualifications ahead of actual financial planning courses, like the CFP certification program, makes no sense to many of our members,” De Gori told Professional Planner, during a break from speaking to members during a live event.
Despite the concerns of these CFP-qualified advisers, De Gori highlighted that 80 per cent of financial planners in attendance at the forums agreed with FASEA’s proposed education standards and code of ethics, the FPA’s polling has found.
Based on the results of the live polls and discussions during the roadshows, De Gori said it would be too early to surmise the new FASEA standards could result in a mass exodus of experienced planners from the industry.
A report by startup researcher Adviser Ratings, released in May, stated that new professional and educational standards under FASEA could lead experienced advisers to consider leaving the industry. The report also stated that disruption in the financial planning and investment advice industry in recent years had led to experienced advisers reconsidering their futures.
The Adviser Ratings report – based on an online survey of 1103 financial advisers, conducted late last year – concluded there could be a $900 billion drain of advised wealth over the next five years as advisers transitioned out of the industry.
Adviser Ratings pointed to regulatory changes driven by the Future of Financial Advice [FoFA) legislation, the creation of FASEA, the sale of major banking wealth management arms and the consolidation of several major insurers in the life insurance sector, along with the current Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry as causes of instability in the industry’s foreseeable future.
Despite the noise being made by experienced planners whose qualifications will be ignored under the new professional standards body, most participants just want clarity and a clear understanding of what is happening, De Gori said.
“They are more frustrated and just want to get on with it,” he commented. “For example, they want to know what education will be counted, what they need to do and how long it will take to complete their studies before making any further decisions. Very similar to [noise during the] FoFA reforms, some stakeholders want to peddle doom and gloom…Our experience is that once there is clarity and the facts are known, most financial planners are rational and will, therefore, make decisions accordingly.”
