FPA calls for financial advice education to be recognised by FASEA
The Financial Planning Association of Australia (FPA) submitted recommendations to the Financial Adviser Standards and Ethics Authority (FASEA) on Friday 29 June in response to its consultation paper on the proposed guidance on education pathways for all financial advisers.
The submission is based on the feedback of 3,393 FPA members who responded to the FPA’s survey on FASEA’s proposed new requirements in April and May; face to face feedback through its National Roadshow held at 33 locations; as well as in-depth discussions via its formal committee structures.
Findings revealed 64 per cent of FPA members hold an undergraduate or post-graduate university degree and 66.4 per cent have been financial planners for more than 11 years. A total of 84.1 per cent of existing advisers surveyed with a “non-related” degree were not comfortable with FASEA’s proposed rulings, as they feel their time and financial commitment has not been recognised by FASEA. Meanwhile 77.9 per cent of CFP® professionals said they were also not comfortable, believing they have already obtained the necessary skills to be compliant.
Commenting on the submission, Dante De Gori CFP®, CEO of the FPA, said: “A key responsibility in setting the new requirements is to ensure the financial planning profession remains sustainable so that advisers can continue to serve their clients in a practical and positive way.
“Our research shows that the existing FASEA proposed education pathways will likely result in the departure of a large number of appropriately qualified financial planners from the profession. This will create a shortage in the supply of quality financial advice available to consumers.
“In our submission, we have recommended a number of enhancements to FASEA’s proposal that will address the complexity of the proposed framework and create a more practical and workable approach that simplifies the education pathways for all advisers.”
The FPA has provided a number of real-life examples that show the qualifications held by existing financial advisers who do not meet the proposed FASEA standard because of its lack of recognition of financial advice specific qualifications.
The FPA’s proposed alternative education pathways aim to provide a fair, simple, cost effective and efficient structure that achieves the objective of raising minimum standards. The FPA’s recommended changes include:
- Simplifying the number of existing adviser categories (based on degree types) from five to three.
- Recognising past and relevant financial advice specific education that is higher than the minimum RG146 standard.
- Recognising the significant study undertaken to attain financial planning certifications, particularly the CERTIFIED FINANCIAL PLANNER®
“We want to streamline the number of existing adviser categories that relate to degree requirements to make things clearer and easier to implement,” said Mr De Gori.
“As the current FASEA education proposal appears to overlook existing advisers’ past education that is specific to the provision of financial advice, we are strongly advocating for the framework to recognise quality, advice-specific education, such as the CFP® Certification Program.”
In a survey of attendees at the 2018 FPA National Roadshow, 79 per cent of respondents supported the FPA’s proposals on the education framework for existing planners and said that it was an improvement on the FASEA proposal.
“The FPA will continue to campaign strongly on behalf of all members and their clients to ensure FASEA adopts a common-sense approach to its proposals,” concluded Mr De Gori.
The following infographic presents FPA’s proposed education pathways for existing advisers.
To view the full FPA submission, click here.