In hindsight new shadow financial services minister Stuart Robert would’ve liked to see the major industry associations take a more hands-on approach with regulating education after conceding mistakes were made with the FASEA regime.
Speaking at the Investment Magazine Retirement Conference in Canberra, Robert said having an external body was a “dog’s breakfast” and didn’t work.
“I’d rather the industry self-regulate itself with the bodies coming together – the AFA and FPA coming together – that would be marvellous, to have its own accreditation body of education or skills or experience would be a far better way of doing it,” Robert said.
Echoing comments he made last weekend to the AFR, Robert conceded the “government got it wrong” on FASEA.
“FASEA occurred before me as assistant treasurer,” he said. “It made a number of errors.”
He said not everything should’ve been prescribed to legislation which would’ve given ministers more discretion to make changes.
“The legislation was poor, but the intent was good. The financial services industry had years and review after review to get its act together on education. The government overreached with FASEA and put in what was a bureaucratic nightmare, hence we got rid of it.”
Robert was critical of the previous RG 146 regime which set out the minimum standards for training for financial product advisers.
“There were practitioners coming through who would do an RG146 and they would do it over two days,” Robert said. “I went and did it. Went to Kaplan, downloaded what I needed to, didn’t bother reading it and sat the exam the next morning at 9am supervised by my department.”
Current financial services minister Stephen Jones said the old model of doing financial advice “took a long time to die but is well and truly dead” and won’t be resurrected.
“It would be misplaced grief if we said every person who has left the industry over the last five or six years was a national tragedy.”
Jones said the industry is on a journey of professionalisation, but it has been a rocky one.
“If FASEA was a good idea it’s been poorly executed. The underlying idea of having an ethics driven, professionally qualified profession providing bespoke financial advice in the best interest of their clients is the right idea and there will be no going back on that.
Another consultation on the education standard is expected to commence in the near future.
Let’s get digital
Robert has continued on from his predecessor’s support of digital advice as the solution to serving a broader base of Australians.
“If you went to see a skin cancer professional and you had a choice between them and AI looking at your arm to determine what you have, you’ll take the AI any day,” Robert said. “The AI will process a billion photographs of skin pigmentations in a millisecond and tell you what it is.”
He added financial advice won’t be the only profession disrupted by automated technology.
“A number of professions will be challenged – accountancy and law, you would take precedented advice from a bot any day. Same now with advice.”
Robert was full of praise for digital algorithms which he is confident will give reliable advice to consumers based on their personal circumstances and market data.
“You have to trust the algorithm, because algorithms are difficult to question.”
In the interest of time
Robert’s speech opened the conference on Wednesday afternoon and was momentarily delayed upon waiting on the arrival of the shadow minister who was watching former Prime Minister Scott Morrison’s press conference.
Morrison was giving his press conference regarding revelations he had secretly appointed himself to cabinet roles during the Covid-19 pandemic.
“I don’t think I featured which was marvellous,” he joked to superannuation trustees in attendance. “I think I was the only one sworn into my portfolio, but time will tell.”
Wow. I can only hope this was a quick overview and some of it not reinforcing good points from Stuart Robert, as from what has been mentioned in the article, there are glaring problems with much of what he said.
With regards to Education standards, Stephen Jones was the beacon of light in a very dark place, as the Liberals, whom I have voted for all my life, totally stuffed it up and could not have done a worse job.
This argument has always been about vested interest groups jockeying to get the best advantage for themselves with little regard for the big picture.
Just look at the end results of all the resources, time and money spent to end up with a total fiasco that drove 12,000 Advisers out the door and most Australians now unable to access affordable, quality advice.
The solution was and still is a very simple fix, though why listen to and adhere to that principle, when instead, the Education, Legal and Audit vested interest brigades took control and turned the blindingly simple, into a maze of doom where at every turn, these gate keepers took a fee for their expertise and led all Australians towards the cliff.
The Politicians were either incapable of, or turned a blind eye to see what was going on and after Stuart Robert’s comments, it would appear both and even after all that has occurred, he clearly does not seem get it.
Let me educate you Stuart so you can avoid making inane comments in the future.
Education MUST be appropriate for what an Adviser is doing today, MUST include experience and must be seen as an added benefit, not an anchor to drown you in irrelevant theory that has nothing to do with the work performed.
Look at the facts. We have a collapsing Adviser structure where only the wealthiest people will access advice, a rising tide of needs for ALL Australians to get help and after a decade of constant reviews and changes to Regulations, we have never been worse off.
Associations will do what it takes to survive and revenue raising is a main priority, which leads hand in hand with education courses that will enhance their bottom lines, which of course is a flawed model once money becomes part of the equation.
I have been saying for over a decade that new entrants and existing Advisers should have their education standards set to what it is they are doing and as Wealth Protection is the foundation of ALL Financial Planning, new entrants should start their education journey with that and then add to their education as they progress into other aspects of Planning.
Ask any Australian when they board a plane to fly to the other side of the world, would they prefer a crew who are brand new with ZERO experience, though very good in theory, or an experienced crew who have been through all conditions and still willing to study to keep up to date with advances.
The current bar is putting sufficient people off even attempting to join and those left behind, many say, much of what was forced upon them, had little bearing on the work they do.
The Politicians need to ask themselves what is it they want to achieve, then set out common sense guidelines that will bring about improvements in a way everyone can understand.
To achieve this, bypassing complexity must be the number one priority.
Make it too hard to read and understand and the end result 100% of the time, is people not reading or understanding.
Hallelujah – someone almost gets it. The professional associations shouldn’t only be regulating the education standards – they should be regulating the profession. Of course the transition from an industry to a profession has been a rocky road. We’ve attempted to do it by allowing bureaucrats to regulate it. It clearly isn’t working, because it can’t work. The sooner we are permitted the essential liberties of a true profession, the sooner we will become one. The powers that be need to understand that, and develop a roadmap to get there. In the interests of all, including consumers, that needs to happen sooner rather than later.