The chair of the Financial Planning Association has delivered a blunt message to financial planners who cannot or will not comply with proposed new education standards.
Neil Kendall told the association’s national roadshow last week that those who do not measure up will be forced out of the industry and required to map out alternative careers, or to retire.
New standards are due to apply to new planners from 2019, and to existing planners from 2024.
“As we transition to a profession and we drag those people along with us that haven’t met those standards, they will either be forced to meet the standards, move on to something else or retire, whichever is the applicable option for each individual,” Kendall said.
“For those who are transitioning [to the new standards] as existing advisers, the cut-off date is January 2024. That’s been pushed out quite a long way to give people the opportunity to complete the required training. For those who haven’t or aren’t going to meet the new requirements, there is an opportunity and a timeframe to meet those requirements or potentially make a different decision about what your career path might be,” he said.
Great time to engage with universities
Although the deadline for existing advisers to meet the new education standards has been extended to 2024, Kendall says planners will be required to comply with a code of ethics, and all planners – new and existing – will be required to sit a competency exam, before that date.
Kendall said there are a number of issues around adviser education that still need to be settled – not least of which is the creation of an independent standards body to set education standards and create an industry-wide code of ethics – but once these issues are taken care of, things will have to move quickly.
“If you look at the timeline for new planners, it’s a January 2019 requirement,” he said.
“That’s actually quite soon, and those of you thinking about hiring people into your business, you need to be aware of these sorts of timeframes and what education requirements people will need.
“It would be a great time to be engaging with your local universities and financial planning students so you’ve got people to bring into your business as we move forward.”
A quick poll of attendees at the Perth roadshow revealed that 37 per cent had a bachelor’s degree and 28 per cent held the Certified Financial Planner (CFP) designation as the highest level of education they have attained. A further 16 per cent held a master’s degree.
“Perhaps not what the public perceives of financial planners generally,” Kendall said. “Perhaps the audience that has not met those is the audience that is not actually here today.”
Pathway to education
Kendall said the pathway to the new standards will vary “depending on where you are in the evolution”.
“Probably for most of you, of [most] relevance is what’s the existing-planner pathway – what happens to those of us who are already practising?” he said.
Of importance here is a planner’s recognised prior learning (RPL), Kendall said.
“It will look at your experience and your current education qualifications and there are still ongoing debates about what level of education will be required for existing planners going forward,” he said.
“There will be an independent body that will be looking at those specific standards. So at this point we do not have a definitive answer other than: it’s not necessarily going to be a degree for those with significant experience and other prior learning.”
