A competent financial adviser needs to grow and develop rapidly and concurrently on several fronts including technical service and professionalism, as well as client-facing competencies such as interpersonal skills, according to an Association of Financial Advisers whitepaper.
The AFA released the ‘Financial Advice Competency Framework: An Industry Consensus’, in partnership with Kaplan, Asteron, and the Beddoes Institute at the 2017 AFA National Adviser Conference to contribute to the new educational framework for advisers, which would be set by the Financial Adviser Standards and Ethics Authority (FASEA).
The paper includes 36 master competencies and several sub-competencies which stakeholders believe advisers should be proficient in, which are then grouped into seven domains. The paper presented the domains and competency areas following consensus from a panel of stakeholders including regulators, licensees, advisers, academics, and clients.
Beddoes Institute director, Dr Adam Tucker, told the conference most competency frameworks currently focused almost exclusively on technical skills but stakeholders agreed advisers needed more than technical skills to qualify as a competent adviser.
“The educators and regulators when asked about the competencies required by advisers focused almost exclusively on technical skills,” he said.
“And to summarise what advice might look like from that statement you might conjure up spreadsheets and documentations. Licensees on the other had started to emphasise client relationship skills and business skills in addition to technical skills.
“Advisers themselves further emphasised client relationship skills and clients and consumers reinforced this even further.”
The seven domains mentioned in the paper includes technical services, professionalism, client focus, self-development, connecting with people, business operations, and strategy and leadership. While technical knowledge included competencies like the financial planning process, cashflow management, and insurance, the client focus, self-development, and connecting with people domains included competencies such as coaching, client needs, client management, trust, effective communication, and psychology.
Although advisers may progress from technical skills to client-focus and self-development, this would not imply that they would stop progress on developing their technical skills. Rather, they would run concurrently.
“For advisers we see this framework being used to review capabilities within your practice: review job descriptions in light of newly described competencies to use it to identify drivers of personal and professional growth,” Tucker said.
Compiling the paper involved an expert panel of 500 stakeholders, over 1,600 written submissions, 60 qualitative interviews with consumers, practitioners, licensees, academics, regulators, and professional associations.