For the past couple of decades, the financial advice or financial planning industry has been on a path to becoming a profession. The status of profession is what advisers craved, and what consumers deserved.
It has not been a simple task. To create a profession, a set of qualifications and standards had to be created. There had to be agreement within the profession itself that those qualifications and standards were tough enough to make it a real achievement to enter and then to stay in the profession.
Critically, the qualifications and standards had to be recognised by the public as imposing upon professionals standards of education, professionalism and behaviour (including ethics) that set them apart. Otherwise, the whole would have been a monumental waste of time.
It’s been a painful process. Advisers have had to pass an exam, and many have had to begin the task of upgrading education qualifications to university degree or equivalent. The higher standards have driven thousands of individuals out of the industry, creating the supply issue that the government is now trying to fix.
As part of the process, two terms – financial adviser and financial planner – have been made protected terms, enshrined in legislation and available only to those who meet the onerous professional requirements.
Perhaps we should have seen coming what’s happened this morning. Maybe the first hint was when the education qualifications were undermined by the introduction of an experience pathway, which effectively regards experience as a like-for-like replacement for formal education.
Today’s truly farcical situation probably shouldn’t be such a surprise. Under measures announced by Minister for Financial Services Stephen Jones today, individuals who are explicitly and specifically less qualified than financial advisers and financial planners will be not only able to offer advice to the public, but also to call themselves “qualified advisers”.
You can’t make this kind of stuff up.
It’s not clear if the government is using the term to describe the educational qualifications these individuals will need to hold. If it is, it’s a stupid and insulting term to use. If it’s using the term qualified in the sense that the advice delivered by these individuals will be qualified, as in not complete or limited, it can only lead to confusion among consumers.
It wasn’t that long ago that Jones was defending the decision to allow super funds onto the advice field with individuals who don’t meet the same education or professional standards as financial advisers by pointing to the obligations of a fund’s trustees to act in the best financial interests of their members.