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The Financial Planning Association of Australia (FPA) has recommended changes to the education standards proposal in its recent submission to Treasury.
FPA chief executive officer, Sarah Abood, said the proposal made in relation to streamlining the education requirements for financial advisers, risks the professionalism journey that financial planners have been undertaking over the past decade.
“While experience is an important factor in competence to provide a professional service to a consumer, education is also universally identified as a key component of professional competence,” she said.
“It’s so important to maintain the gains our profession has won and keep the trust of consumers. We cannot return to the days when a planner could technically be qualified with only a two day course, with no timeframe for that to change. For this reason, the FPA does not support the proposed 10 years of experience in the past 12 years pathway as proposed.
“We believe this is an insufficient foundation to meet the objectives of raising the minimum education requirements for the financial planning profession, while also continuing to build consumer confidence in the profession.
“If, however, Treasury plans to move forward with an experience pathway, it should only be available for those professionals aged over 55, with at least 15 years’ experience gained in the past 20 years, and be sunset in 10 years’ time,” she said.
This approach would reduce the potential for discriminatory impact of the current proposal, recognise the experience of longstanding members, and still allow for a profession with all practitioners being tertiary qualified within a reasonable period.
Ms Abood said in order to make tangible changes to education standards that will benefit the profession, the existing framework should broadly be retained, however with added flexibility for more experienced financial planners.
“This will help alleviate pressure being felt by experienced, skilled professional financial planners, but maintain the intent of the framework which requires financial planners to be tertiary qualified,” she said.
“It also recognises that many practitioners have already invested substantially in education under the current pathways, and that should be recognised and supported.
“We believe there is also room for a conversation to be had about specialisation and competency frameworks, as part of the upcoming Quality of Advice review. For those planners whose practice lies exclusively in a specific area (such as personal risk), we think there’s scope to allow for the training and education requirements to be more targeted than is currently the case.”
As part of preparing a response to the consultation, the FPA again surveyed members to better understand their views on the proposed modifications.
“Importantly, 83 per cent of FPA members have already met, or are on track to meet, the existing education standards and a majority of members oppose the proposal made by Treasury in this consultation.
“For the most part, our membership supports an education framework which includes more recognition of prior learning and experience, which we believe FASEA failed to take into consideration sufficiently as part of their legislated framework.
“FASEA got it wrong with its one size fits all framework. Financial planners have entered with a variety of degrees and prior career experience, and they shouldn’t have to restudy what they already know,” Ms Abood concluded.
A copy of the submission is available on the FPA website.