Advisers Jordan Vaka, Michael Miller, Ray Ong and James McGregor

While opinion on the proposed carve-out to education standards remains divided, a growing cohort of advisers are speaking out against the move via submissions to the government’s consultation on the scheme.

The ‘experience pathway’ proposal, originally put forward by Labor’s Stephen Jones and then the government just days later, seeks to stem the flow of advisers leaving the advice industry by exempting those with 10 years experience and a clean record from the equivalent degree requirement.

The proposal angered many advisers who see it as not only a major step backwards on the industry’s journey to becoming a profession, but as rewarding the inaction of those who haven’t satisfied the requirement.

Such is the ire, many are now putting pen to paper.

“Advisers are tangibly angry about this,” Melbourne adviser Jordan Vaka tells Professional Planner. “For this to be dropped on us now is infuriating.”

Vaka’s submission to Treasury makes the point that the proposed carve out doesn’t actually solve either problem of advice affordability or availability.

“By carving out yet another loophole to allow uncommitted advisers to keep operating, we are just kicking the can down the road,” he writes. “What use is it to maintain ‘supply’ when the cost of doing so is compromising on fundamental standards?

“This only benefits a small number of advisers who didn’t want to play by the rules, not the majority who’ve done the work,” Vaka says.

A backwards step

Perth adviser Ray Ong agrees that the proposed carve out “will not stop the exodus of financial advisers”.

“There are many more reasons why advisers are leaving,” he writes in his submission, noting that the removing the requirement to produce written Statements of Advice would be the “quickest and most impactful” way to reduce the cost to serve.

Apt Wealth Partners director James McGregor says watering down the education standards at this point would “diminish the effort advisers have put in” to meet the new standards.

“The bottom line is the whole industry has been going through a significant period of transition and this is the final piece of the puzzle to demonstrate to the community and the regulator that a financial planner is qualified and has gone through the various steps to call themselves a professional,” McGregor says.

“Any softening at this point would be a backwards step in terms of getting us to the end goal.”

Creating doubt

Canberra adviser Michael Miller tells Professional Planner the carve-out will amount to an erosion of trust for consumers looking for surety from the sector.

“What the common standard allowed was that any consumer thinking of going to a financial planner could have an expectation that an educational standard was met,” he says. “There’s some link between that perception and trust.”

In his submission to Treasury, Miller argues that instead of making advice more affordable, diluting the standards and creating doubt in the minds of consumers will actually make advice more expensive.

“Low trust… serves to further harm accessibility of advice because the process of building trust with each prospective client on an individual basis takes time for a financial planner, which results in a higher financial cost for the advice process,” he writes.

Miller suggests a compromise in his submission, whereby advisers still need to complete an 8-unit equivalent degree in a related field of study but advisers receive two units of study for every ten years of experience – capped at four units and 20 years.

Under this hybrid model there would also be a widening of the related subjects for the qualification pathway.

“The combined model reasonably satisfies a consumer’s expectation that a professional financial planner has undertaken a level of formal study in their field of practice, with the flexibility for existing advisers to study topics that are relevant and complimentary to their practice,” he writes.


11 comments on “‘Tangibly angry’ advisers rally over degree carve-out plan”
    Tricia Peters

    Requiring experienced financial advisers to jump through the tertiary education hurdle makes no sense. Tertiary degrees have a shelf life of about 5 years. There is a move towards micro-credentials. What is important is that professionals keep up with changes and innovation. Most, if not all, advisers have done some sort of study – the standard of the day – a diploma or CFP. And COD in spades. It’s insulting to suggest that advisers who have kept up COD and who have years of experience have anything to gain/learn from doing a tertiary qualification. Clients won’t benefit and the profession won’t benefit. Just a big distraction and waste of time, effort and money in my opinion. Other industries (law and accounting) morphed into professions and grandfathered experienced members into the profession successfully. I don’t buy the ‘it’s not fair’ argument. Life’s a bit like that! Don’t get me wrong, I’m in favour of having an underpinning degree for the industry from which new incumbents can launch their career, and build with skills and knowledge with micro-credentials and ongoing COD. Let’s not turn on each other and support those who have been the backbone of the industry and those who are the future of financial planning. We can do it together. For transparency I have over 25 years experience as a university lecturer, the last 10 or so in designing and delivering financial planning degrees.

      Tricia Peters

      CPD not COD

    Justin Daniel

    apologies for my sloppy English! I’m fired up :)

    Justin Daniel

    Someone wrote- The underlying problem is that advice is just not affordable to those in the most need. This is the VERY REAL problem we see every day..

    So yet again i feel this advisers not worrying anyone apart from themselves- sometimes (most of the time) its what’s for the greater good. I struggle to find an argument that losing another lets say 20-30% of advisers is going to help things in Australia in relation to advice. Yes, there are unfortunate stories of people leaving who might not have. Thats also a fact.

    A very high % of the people gone (if we were honest), are the ones we needed to move on. What we have now its a mostly dedicated workforce. Let them stay, get rid of 50 page SOA’s and lets as an industry change the perception buy the collective doing the right thing and changing lives. I am adviser, 15 years down and have a degree, i also know of 10’s of advisers without degree’s wo are great at that they do, that will leave. We cant afford to lose these people.
    For once, both parties agree on something! then we as the people push back. WOW!


    Agree with Trevor 100%. I did the 5 unit CFP course, plus an Advanced Dip and am a responsible manager of an AFSL with 20 years plus experience as an adviser but still needed to do a Grad Dip. I am almost finished my Grad Dip and also have not learned anything new. The CFP supposedly the peak qualification an adviser could aim for which in hindsight was not the case. The fact they are now suggesting we reverse the education requirements after getting everyone to start this process is moving goal posts personified, and dismissive of those who decided to get proactive with the new education requirements.

    Cecil Grimmer

    “But where are the clowns? Quick, send in the clowns. Don’t bother they’re here”. For all the ‘oldies’ just play “Send in the clowns” (Judy Collins or similar). Nothing more to be said – we will go with the madding crowd. Sometimes I feel that little has changed since the days of Port Arthur – just salute, say ‘yes sir’, keep your head down and get on with it.
    On the other hand something can and should be done.
    Some good comments on the pros and cons of the proposed amendments. Perhaps a degree in another life could have more recognition especially a real one in the sciences! Sadly, we all understand that many recent graduates are not sufficiently well prepared to provide competent advice be it accounting or financial planning. If they are to enter a profession, soft skills expected of a professional should be a given. Many do not know how to address an envelope. One master’s student looking for experience took six attempts to get it right. I raised this with the institution she was at and the reply was – ‘why are you making a masters student address envelopes?’ A luta continua!! The ‘one year’ experience, like much of the legislation, is a just a thoughtless thumb suck. If you put your hand on your heart and want a ‘profession’ then, like other professions, a full qualification needs a good deal more than a single year of working in the field.
    The underlying problem is that advice is just not affordable to those in the most need. This is the VERY REAL problem we see every day – education is a political red herring on the side. Badly managed. Badly debated. Badly implemented.
    The forgotten equation here is what do the people that matter most – the general public – want? The rules and regulations around factual, general and personal advice, and its practical implementation need to be revisited by a competent group of people – not just office wallies who have never been in the trenches. If the very people it is designed for do not understand the legislation – there is a fundamental problem.
    If we need to do a few degree courses at 70 so be it. It will not be difficult as alluded to by some of the egos who have commented elsewhere. It is part of that greater question of ‘productivity’ in our community – something this whole debacle fails miserably on. Sadly, a common theme of most ‘Ivory Towers’.

    Nathan Fradley FChFP

    I think advisers on both sides of this debate have the right to be angry.

    The FPA positioned the CFP as the mark of highest standard. Advisers strived for it, and it was bloody hard

    There was an industry wide acceptance we needed to increase education standards. Most of the the large licensees put a timeframe around completing the CFP, FChFP or Masters. Advisers started working towards these standards.
    Then when FASEA came in, they marked the CFP and FChFP as completely redundant, on top of non-approved units within the Masters degree.
    I can understand the reluctance to take steps towards the FASEA standards given the historical juggling of education (and given the CFP is a far higher standard than a tertiary Grad Dip). I particularly think the lack of recognition for experience in a role with a focus on on-job skills and human interaction was the wrong approach – however I also think a 10 year timeframe is laughable. And this is from someone with 10 years of experience. This is not an issue of competence, its an issue of perceived competence and standard, and while I may not agree, society respects tertiary experience. we as an industry need more trust – but we need to earn it. We cannot simply flick a switch to gain this, but a standard of resetting the education from a course I finished in 6 weeks is a critical step.
    With that we earn a ticket to the game of regaining trust from the community at large. With more community trust, we can the rights to less government regulation, more self regulation and the cycle continues. At it stands we have crawled our way back to 51% trust rating from consumers, and any reduction in standards is a step backwards (although I think some credit for experience could be added in, not a full exemption. Even the discussion of this paints a poor image n the public eye.

    We should be focusing our efforts of progressive changes to policy to remove product from advice, gain tax deductibility and more flexibility in advice delivery – this is a distraction from real progress.

    Jeremy Wright

    There are always going to be arguments for and against any submission.
    What seems to be glossed over, is the REAL impacts of change.
    The argument that by doing theory based study, is going to solve all the problems of Professionalism, or the perception of Professionalism, does not allow any other logic or real world experience to be part of the solution.
    For every Adviser who has provided advice for 10 years of longer, they have already done thousands of hours ongoing study and every year, faced very strict Auditing protocols.
    What has upset most Advisers is the lack of recognition for all the prior qualifications and ongoing study that was done, as well as the experience built from decades of being at the coal face with and for their clients, which was treated with contempt from the Intellectual elites and vested interest Education entities who saw massive financial gains by forcing Advisers to do never ending theory based education courses costing thousands of dollars and taking Advisers hundreds of hours away from their Businesses and families, for in many cases, irrelevant and outdated studies that had little bearing on the work they did.
    One of the most educated Financial Planners who I have held in the highest regard for decades, posted an inciteful and well thought out submission here, when she articulated her theory based Qualifications, which were more than anyone I have met over the years and yet she said that there is a simpler way to stop the exodus and still allow thousands of Advisers to continue doing the great work they have done over decades and to also allow the Industry to rebuild.
    Her idea is simple and brilliant, in that it promotes those Advisers who have attained the top levels of education by showing all Australians what theory based education they have successfully completed and be given the highest qualification recognition, then for everyone else, clearly articulating what theory based education and experience they have attained, then let clients determine what is their preference as to who they have as their Adviser.
    It appears that clients are not given the chance to speak out as to what is more important for them and any decisions must be made for them, not by them as to who they want as their Adviser.
    All Advisers must comply with the current Regulations and are still required to do extensive ongoing training, so having in plain English what theory based qualifications each adviser has attained, their history and their experience which can be put into a designated
    ranking and easy to read category of attained recognition, makes total sense.
    Instead what we have is an elitist situation, whereby all medical General Practitioners are to be removed from practicing until they have passed all the specialist requirements across the full spectrum of human health and medical conditions.
    Can you imagine the uproar and total chaos, when most GP’s are closed and Australians cannot get in to see a Doctor, though are now waiting 10 or more hours at a hospital to get medical attention that is now causing a collapse of every hospital in Australia.
    For every ACTION there is a REACTION.
    What we need to decide is the cure better, or worse than the perceived ailment.

      Les Batchelor

      Well done!

    Trevor Thompson CFP

    I got my shiny new Graduate Diploma the day the libs said they would support Labor and my Grad Dip became a white elephant. I met the requirements. I think the guys commenting here feel aggrieved about doing work for no result.
    For some perspective, with over 25 years of experience I learned exactly nothing that benefits my clients by doing a course of study to prove to someone else that I already know what I know. Give us a break guys

      Les Batchelor

      I second this, well said Trevor!

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