At the halfway point of his FASEA-mandated professional year, provisional adviser Harry Baker says he’s come to appreciate the additional structure the education authority’s program enforces, and feels like it’s putting him on the right track to becoming a fully qualified adviser.
Baker, who works out of advice firm Eureka Whittaker MacNaught in Sydney, was one of the first to sign up to the professional year mandate imposed by the Financial Adviser Standards and Education Authority on January 1, 2019.
Despite this, the 24-year old says he didn’t give much thought to being at the vanguard of the new generation of advisers.
“I guess I’ve done a few things in my life like this,” he says. “I just say yes and do it, then see how I go.”
According to the standard, a new industry entrant must complete one year of full-time work totalling 1600 hours (of which 100 hours is structured training) under the guidance of an experienced adviser, developing four areas: technical competence; client care and practice; regulatory compliance and consumer protection; and professionalism and ethics.
After working at Eureka’s Brisbane office in client service and paraplanning roles, Baker jumped at the chance to move to Sydney and learn from founder and CEO Greg Cook.
“I just thought it was a good opportunity,” he says. “So, I drove down there and knuckled down.”
Cook himself calls Baker a “competent and professional young lad”, which explains why the firm wasted no time getting him “fast-tracked” onto the PY when it opened. “He’s already more qualified than me,” Cook adds.
Baker completed his bachelor of commerce at Griffith University under the tutelage of finance professor and FASEA board member, Mark Brimble. He is well aware, however, of the difference between education and experience.
“Yeah, Greg sometimes tells clients that I am in some ways more qualified than him, but there’s nothing like ten years of client-facing experience, it’s very different from what you learn at university,” he says.
“That’s actually been one of the best things, seeing how Greg deals with different questions and approaches different client types; it’s not something you really learn in a degree.”
In practice, the PY schedule is similar to the track an associate adviser might undertake on the way to becoming an adviser in their own right.
The year is broken into quarters. According to FASEA the first quarter involves joining client meetings in an “observation and support” role, then the second quarter moves onto “supervised client engagement and advice preparation”.
The entrant must pass the FASEA adviser exam before continuing on to the third and fourth quarters, which entail “indirect supervision of client engagement and advice preparation”.
The benefit of the program, according to Baker, is that it adds structure and guidance to what is sometimes an ad-hoc development process. “I’m enjoying the additional structure and training,” he says. “Each quarter you progressively increase your [level of] client contact and the amount of advice you give.”
Baker logs his activities on a template he sourced from the Financial Planning Australia website.
“I’ve got a task in my calendar to update my logbook at 4:30pm each day,” he explains. “It’s quite a detailed spreadsheet, and at the end of each day I just log the clients that I’ve seen, the work I’ve done and the hours it’s taken.”
A big commitment
The way the professional year is set up isn’t quite perfect yet; Baker says there are “unknowns” and tends to refer to the FPA’s guidance more than FASEA’s, while Cook notes there was bit of “fine tuning” that occurred during the early stages of the process.
Filling out the logbook also takes time, though Baker says he mitigates this by categorising the specific tasks at a high level.
One issue he does highlight is the need to line up registration for the FASEA exam before provisional advisers begin their third quarter. After missing the cut-off for the most recent exam, Baker needs to wait until September before he can – hopefully – pass the exam and start logging hours towards his third quarter. “It means I’ll have to delay the 12 months a bit,” he says. “Ideally you’d figure out what exam you’re going to sit before you start and line it up so everything’s perfect.”
Despite its shortcomings, Baker is a fan of the professional year and calls it “fantastic”. He acknowledges, however, that a lot of the program’s success boils down to the mentors and how much effort they’re willing to put into training the young advisers.
“It takes a lot of time from the head adviser, which in this case is Greg. There’s a lot of additional hours from them, going through things one on one, so it’s quite a big commitment.”
Cook himself says he’s “warmed” to the idea of having two people in meetings, and come to enjoy the mentoring process.
“It’s one of the things I actually get a lot of pleasure out of… seeing young professionals come through that have particular skills the older generation doesn’t and vice versa.”