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.
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