Plenty of concessions were already made when establishing the education standard for existing advisers making the experience pathway overkill, according to a panel discussion.
Then opposition financial services minister, Jane Hume, proposed the pathway in late 2021,which the Liberal government took to consultation at the start of 2022. It was followed by another consultation after Labor won the federal election later that year.
Speaking at the Professional Planner Advice Practitioner Summit, Integra Financial Services co-founder Deborah Kent said the profession previously landed in the right spot with education the education.
“[The standard included] eight subjects in the graduate diploma with prior learning recognised,” Kent said, alluding to the minimum standard for an adviser without a degree.
“A majority of advisers, if they only had to do ethics courses may have only had to do four subjects given that they’d have designations that were [recognised prior learning].”
Kent, a former FASEA board member, acknowledged the bias in her view, but said she believed the carve out is wrong course of action.
“A lot of us have already invested time, money, effort, and energy to do this education and have qualified themselves,” Kent said.
“If the government is going to allow this, there should still be some study required”.
Kent had professional designations and an advanced diploma, which meant she only had four subjects to do to fulfill the education standard – the three bridging courses and an elective subject.
“If I set the rules, [I] have to walk the talk; I did my four subjects over two years,” Kent said.
“I ran my business, had a major health issue in between and [family commitments]. It was hard because I lost weekends, I lost time with my family and there’s a [financial] cost to it.”
Kent said she does have sympathy for older advisers that do have to go through the process.
“Of which I’m one of them, but I feel sorry for those in that risk space,” Kent said. “There needs to be a minimum education standard.”
Staying alive
Coming from the life insurance industry and seeing the depletion of risk advisers, Metlife head of growth markets Dean Thomas had a different view.
According to data from Adviser Ratings from last November, there are fewer than 200 “pure risk” advisers in the industry. Of the under 16,000 advisers on the ASIC Financial Adviser Register, 77 per cent are writing little to no risk premiums.
Based on research from Core Data, risk writers write approximately three times the average premium per client compared to holistic advisers. This experience is needed to overcome the underinsurance issue that is being experienced in the market.
“The exemption is the right exemption – while we call out professionalism in the industry, I know many advisers who have operated for a number of years that are probably the most professional advisers I’ve ever deal with,” Thomas said.
Thomas spent two and a half years from 2017 as managing director of then AMP licensee Hillross Financial Services.
“Some of those [Hillross] advisers had years of experience, they might not have had that tertiary education, but what they had is life experience, understanding their clients, understanding the law, understanding the best financial outcomes for their clients.”
Thomas said the pathway is a valid option and 10 years is sufficient experience which would involve living through several market cycles.
“It’s hard to tell someone they can’t do their job,” Thomas said.
“They definitely need to have educational requirements – RG146 plus [CPD], a clean record but we also need to be mindful of what that means,” adding it should be a banning that was reflected on the FAR.
Navigating the pathway
GPS Wealth provides support services to 80 advisory firms and the licensee’s head Tara Ross said there are few in the network awaiting the outcome of the pathway.
“What we’re hearing from those practices is we’ve got a small number who are waiting out the outcome of the experience pathway debate or have planned succession before 2026 and won’t undertake further study,” Ross said.
“The overwhelming majority are supportive of [the education standard] and have completed their study or are well on the path.”
Ross said there isn’t a right or wrong from GPS’ perspective on whether their licensed advisers pursue the pathway since the advisers aren’t employed by the licensee.
“They all have a choice whether they undertake further study or not, but our role as a service provider is making sure they understand the impact of that transition and how they are going to transition their business if they decide not to undertake further study,” Ross said.
However, Ross personally maintained her belief in the education standard.
“We are on the cusp of being recognised as a true profession and that can’t happen without consistent and established educational, professional and ethical standards,” Ross said.
Dean Thomas has a very good grasp of what the real world is having to go through to please the theory based, vested interest entities who derive their revenues from forcing Advisers to be subjected to studies that in most cases have NIL or limited bearing on the work actually performed by risk advisers.
I have 36 years experience and my Business has a 100% success rate with claims, yet I was not allowed to continue as an Adviser, unless I complied with the most ridiculous and outrageous restriction of trade imposts that led me and thousands of other vastly experienced Advisers to walk away from providing risk advice.
The result of the insane and ZERO sense policy that people like Deborah Kent have been promoting as a cure all, in conjunction with the Government making the provision of risk Advice too hard, has led to Life Insurance New Business income reducing, existing premiums skyrocketing and lapses rising, with a diminishing pool of Advisers who want to work in the risk space.
What is the benefit to Australia if the advised Life Insurance Industry collapses, which it was going to do, unless there was radical change?
The Liberals were on another planet and even though I have never voted for Labor, at least they recognised that experience is important.
The FPA NEVER understood how the risk Advice Industry works and Deborah Kent was very vocal in promoting and encouraging the regime that pushed the Life Insurance Industry into a very bad place.
For many years I have been calling for risk advice to be separated from Investment advice. I warned what would happen if this was not done and my crystal ball was right, though anyone with even a basic understanding of the Life Insurance Industry could see this train crash coming.
The question that must be asked is, how many of the NEW Advisers over the last 3 years who have come into the Financial Planning Industry, are specialising in risk advice?
Based on the amount of, or lack of, true New Business, the answer is right in front of us.
In my extensive research of the professions, not one profession, on professionalization has required existing practitioners to go back to complete a degree as per the requirement of new entrants. A degree is an accreditation instrument or document that assists in the certification of a newly fledged professional entrant. A professional, on the other hand, has already acquired entry, and as a learned(whether by practical experience or regular scholarship (CPD)) member of a profession, has developed and displays a lifelong love of learning. WE already have many industry tools and pathways to continually develop our professional skills and knowledge. requiring long-practicing professionals to go back and complete a degree, serves no purpose for the profession but instead only leads to negative outcomes such as: (1) driving out “old experienced talent”, which we have seen happen already, (2) satisfying some conception among the ignorant that it is only in the holding of a degree that any member can prove their credentials and right to practice, and (3) instill trust in the masses regarding the status of a profession… Points 2 and 3 are the results of ignorance and hysteria. I do not have the room here to address the empirical evidence rebutting these incorrect views but will simply conclude with the following: The vast majority of the scholarship material used by the universities has been developed in close collaboration with existing practitioners and academics. Trust is not instilled in a profession because one holds a formal degree….in fact, if society is aware that you need formal and intensive training to practice a particular profession, that perculiar general
You are all kidding yourself if you think we can become a Profession whilst still allowing vertical integration.
It anathema to the very concept of a Profession.
The reality of the situation is that without an experience pathway recognising competent experienced advisers, there won’t be enough advisers writing risk post 2026. This will have a massive impact on the retail insurance market with huge sustainability issues. Education at that point would become irrelevant.
If you were going in for major surgery, would you favour a surgeon with 25 years experience and an impeccable record or a recently qualified surgeon with multiple degrees? The outcome has to consist of a mix of experience and education for the industry to continue.
Agree with Deborah Kent’s via 100%. It’s a big deal completing the Education Requirements (not optional education), yet it has to simply be done. The fact a carve out is even being considered is mortifying.