The Association of Financial Advisers has a counter-offer to the government’s proposed Education Pathway; take a more detailed approach to the amount of experience planners have behind them and allocate required learning accordingly.
In a submission on the pathways consultation released Wednesday the association put forward a proposal that still used the ten-year benchmark, but rewarded longer experience with less study burden.
Advisers with more than 10 years’ experience should do a full four subject graduate certificate, the AFA stated, while those with 15 years’ experience get one subject credit in a four subject graduate diploma and advisers with over 20 years’ experience would get a two-subject credit as part of a required four subject graduate diploma.
Currently, the proposed Education Pathway would exempt advisers with 10 years’ experience and a clear disciplinary record from the equivalent degree requirement – a move which has been criticised as watering down the education standards.
The association also took a red pen to several other aspects of the proposal, such as the requirement for the 10-year exemption to be met within a 12-year period.
“The 10 years full time out of the last 12 years requirement is potentially discriminatory to advisers who have had a period of paternity/maternity leave or who have worked part-time for an extended period,” the submission stated.
The AFA said the 10-year full-time experience requirement would impact advisers who had recent periods of absence from the profession, took on other roles or worked part-time.
Citing the “untested” single disciplinary body regime, the AFA said it did not support the clean record requirement for the experience pathway.
The AFA recommended existing advisers should be able to stick with the existing FASEA standard or pursue on of the pathways in the new proposed standards.
Funding PY entrants
Responding to advisers’ angst over the expense of taking on Professional Year entrants, the AFA proposed funding support to encourage employers.
“The problem has been compounded by many of these practice owners being caught up in their own education requirements and otherwise in a world of intense regulatory change, which has impacted their ability to focus upon the recruitment of new advisers,” the submission said.
It highlighted the point which had been made by others in the industry that businesses were struggling with the capacity to find adequate roles for new entrants.
“This has become a critical problem and one where we think that Government intervention may be required to give it a kickstart. It does not matter how many potential new entrants come through the university pathways, if businesses do not have the appetite or capacity to recruit them.”
The consultation proposed the broadening of approved bachelor’s degrees with the caveat new entrants would undertake a specialised graduate certificate.
The AFA submission said if the consult was enacted as proposed, it would have “significant implications” for new entrants attempting their PY.
“They would have much less relevant financial advice knowledge and would need to undertake further study to be employable.”
I think a simpler system is the answer…no other industry has went through as much backward and forwarding during the process of professionalization… this is getting beyond silly…we need to work out the years experience that on average defines a practitioner as “quarantinable experience”. maybe more like 15-20 years
I believe that the AFA proposal has merit because it lifts the educational standard of all involved in the industry.
the educational standard of existing adviser is met via cpd and ongoing training that demonstrates the practitioners hunger for a perpetual upgrade of knowledge. To go back after many years and undertake a degree is not supported by the concept of professionalisation
Having a, “one box fits all packages” strategy has flaws.
So did the totally flawed FASEA Education regime that caused mayhem.
There will never be a perfect strategy, though I would have thought that the actual experience and specific fields of expertise that every Adviser has been advising on, backed up by their annual audit results, complaints register and ongoing training, would be something each practice and Licensee would know about their Advisers and would include in their FSG, what the Adviser is authorised to give advice on, based on their experience and Education learnings.
Then as the Adviser attains more knowledge on the job, in conjunction with ongoing Education, their resume will grow and what they can advise on will be expanded.
Today, the Financial Services Industry and especially the Life Insurance Advice Industry is not working, which can easily be seen as per the 10,000 plus Advisers who have exited, the cost of Advice rising to unaffordable levels for most Australians and Life / Disability premiums skyrocketing, with Advisers effectively being forced to scope out Insurance advice, as the cost to enter, or stay, is too prohibitive.
All this hand wringing and theoretical problem solving has not answered the obvious request from Practice owners, which is to allow us to employ Advisers without sending us backwards and making it too hard to rebuild and get on with our jobs.
The truth is, that the very people who have been directly impacted and not in a positive way, are all Australians and the small Advice Businesses who actually provide employment, who got pushed to the back of the queue, while vested interest groups took control.
In plain English, if it becomes too hard and no longer feasible, then the options are to leave, or increase fees, scope out unprofitable areas of your Business and only work with a select clientele.
Based on the last two years, both those options have been played out which has been a disaster for everyone.
There will be howls of dissent by my next comment, though in order for the retail Advised Life Insurance sector to have a chance to regroup and rebuild, the Government will need to separate risk advice from Investment advice. WHY?
There are thousands of experienced risk advisers who have left the Industry and only a handful who are entering.
Do the math and look at what is going on with Life/Disability premium increases, rising claims and insufficient Advisers to make up the losses.
The solution is to enable holistic Financial Planners to bring into the practices, risk advisers who only do Insurance to look after their clients risk planning needs and the only way to do that is to make it feasible for people to want to work in this very important field.
We all know that most Business people and all families carry debt and ongoing expenses that upon them dying or becoming incapacitated and unable to earn their income, means their finances and their financial future is like a house of cards waiting for a wind to blow it all down.
What the current regime of IDEALISM has done, is to put at risk what all Australians are trying to build, which is a future that enables them to have an Adviser to guide them and if they have an illness or injury that prevents them from being able to carry on, then there is the Insurance support to keep their dream alive.
For most Australians without proper Advice, that dream can be a nightmare that never ends.
Yes, A grey area indeed. Advisers have 2 years to do 1 exam and fail as many times. Now they have until 2026 to be up to speed. Why are we going professionally backwards? How are we going to explain this to customers? Most advisers I know with 20 years experience have been doing their required education and passed FASEA exam. Younger ones with 10 years have to have tertiary qualifications anyway.
Not like advisers to over complicate things?
Let’s just get on with it – maybe sun adviser who skips study in current agreed plan of attach – go do some pro bono work instead ?
Let’s really help and change perceptions !?
I’m a AFA member, degree adviser and do not agree with above