The FAAA will recommend an education level higher than a bachelor’s degree for Qualified Advisers, trumping the Council of Australian Life Insurers proposal to have a sub-diploma level qualification for so-called Qualified Advisers.
The FAAA will suggest a Graduate Certificate, which is an Australian Qualifications Framework (AQF) level eight and higher than a Bachelor’s Degree (AQF7), but typically requires only six to 12 months.
CALI announced via Professional Planner last week it had recommended to government that QAs should only require a Certificate IV (AQF4). “Clearly we disagree,” FAAA chief executive Sarah Abood says on the insurer’s proposal.
While most candidates for a qualified adviser role may not hold a degree, Abood says current workers would likely be able to qualify to commence the qualifications if they have a couple of years work experience.
“These graduate certificates already exist, most of the unis built them for existing advisers,” Abood tells Professional Planner.
“The work has been done, the material is there. The assessment has been done for what someone actually need to know in order to advise a client.”
The Labor government announced QAs would be introduced as part of its response to the Quality of Advice Review, leading to negative feedback from the advice profession who felt the name misrepresented the level of authority QAs would have. Minister for Financial Services Stephen Jones has since indicated the name will likely change.
However, the bonus for the greater advice profession with the FAAA proposal is that by having completed a Graduate Certificate which is four units, qualified advisers would only need to complete another four units to gain an approved qualification, creating a streamlined pathway for QAs to fulfill the education standard without any concessions to the rules.
“The idea then is you’re in the ecosystem, you’re on the pathway to become a full adviser,” Abood says.
“Then having got that grad certificate, you’ve just got one more year [to do a] grad diploma, then all you have to do is a Professional Year, then you’re an adviser.”
However, she says there is still the issue of cost, and the association is pushing the government to offer support to alleviate that stress.
“If it was full fee that would be something like $3500 to $3700 per unit and what we would be calling upon the government to do is to offer Commonwealth support for that,” Abood says.
“They’ve yet to do anything tangible to help us rebuild the numbers in this profession. If we were able to make that a Commonwealth-supported course, then the actual cost to the student would only be $600 a unit and I imagine employers would be willing in many cases to fund that.”
By utilising Graduate Certificates that had already been created to fit into the stringent education standard, Abood says it removes the potential for lower quality courses to pop-up to fulfill the demand.
“We’re also worried about going back to that world of RG146 when there’s hundreds of courses pop up at varying levels of quality and so on and we end up with no consistent standard,” Abood says.
“Because [the courses] are already there it also helps us support the unis that are really suffering because they don’t have enough students coming through.”
She adds this will also help add interest back into many of the university courses that saw demand drop due to the experience pathway which passed parliament last year.
“We’ve had a bunch of those post-grad degrees close this year, I think we lost four at the start of the year because the of the experience pathway, the unis are just not getting the numbers through, they can’t support them,” Abood says.
While the FAAA’s recommendation seems stringent given there’s a much higher barrier to entry than what might have been anticipated, Abood says this proposal is designed with current call centre workers in mind, not backpackers or high school leavers.
“To me it’s not something that someone straight out of high school should be thinking about,” Abood says.
“If you’re in that stage and you’re thinking about entering the financial planning profession then do the financial planning degree, do the PY, that pathway already exists.
“This new class of adviser will have a lesser scope and lower qualifications, but they’ll still have a more in-depth conversations with clients about their finances and what their best options are and I would be pretty reluctant for that to be someone who is fresh out of high school.”
There is a vast gap between vision and reality, though what has occurred, is the vision has caused untold damage to the Wealth Protection Industry and millions of Australians, by allowing “visionary” Utopian and vested interest groups to take charge of the pathway with their bold, bright, glorious strategy of Professionalism at all costs, which in it’s own right, has some merit.
What was not considered and in actual fact, ignored, was sage advice and warnings of the consequences of dragging Insurance advice into the world of degree qualifications for what has been the case, mostly irrelevant study materials that had little to nil bearing on the work risk specialists would perform.
Throw into the mix, multi-thousands of dollars and hundreds of hours of non-specific, education mandated requirements, built by people with ZERO knowledge of what the job entails and what we ended up with, was what was told would happen COUNTLESS TIMES, which was a collapse of the Advisers in the risk space.
Human history is full of theoretical experts who had little actual experience, though felt that they must be the fountain of all knowledge that is wise and good and god forbid listening to those who actually have experience and actually know what they are talking about.
Even today, with twelve thousand Advisers gone, the Life Insurance sector decimated and Australians being screwed to the wall with huge premium increases to offset the missing New Business that holistic Advisers have walked away from because they cannot find any risk advisers to write Business, what we are still faced with, is a wall of visionary blockages that are still following the same mantra that is destroying the Advised Life Insurance sector, yet none of these visionaries seem to care.
Of course, many of the main perpetrators in this fiasco, ( except for Politicians and Public servants who are never financially impacted due to them being impervious to the chaos they create ) have been the cause of their own financial difficulties, when shock and horror, those twelve thousand Advisers who they had already put into their calculations as full paying students and members, had the temerity to leave the Industry, which was a shock and financially detrimental to their grand plans.
What is the solution they say to themselves?
The solution is not to actually fix the problem facing all Australians by making the provision of risk advice an affordable proposition, no, no, no.
What they propose is the good old Government bailout for themselves and their kin.
And we wonder why Australia is heading for a Trillion dollar deficit and our economy being smothered with more red tape and theory based, visionary utopia.
Are there any more Golden tickets?
If you take a look at the UniSuper website, they seem to have the naming convention sorted. Their QAs are named consultants,( eg super consult or retirement consultant)and then their advisors are also in categories based on the level of advice you might be seeking. For example, Select, comprehensive etc.
Why reinvent the wheel?