The current educational standards for financial planners, which have been defined by the Financial Adviser Standards and Ethics Authority (FASEA), need to better recognise previous experience and studies, according to the Association of Financial Advisers (AFA).
In answering questions during a parliamentary hearing from South Australian Senator, Rex Patrick, the AFA’s acting chief officer, Phil Anderson, said that the explanatory memorandum specifically referred to the ability to recognise experience through continuing professional development (CPD) and other studies that advisers have taken in the past.
“What we’ve identified though is that the current standard has been defined by FASEA does not adequately recognise experience for previous study and in particular CPD that has been done by financial advisers,” he said.
“There is a lot of longer-term financial advisers who are not getting any credit for what they’ve done in the past and are required to do eight graduate diploma subjects,” he said.
Anderson said that over the years the subject had been raised with the minister, who has currently delegated its powers in that matter to the FASEA, as well as with the FASEA itself through a number of submissions and interactions.
Speaking on the education standards, chief executive officer of the Stockbrokers and Financial Advisers Association (SAFAA), Judith Fox, said that according to the legislation the members of her organisations were required to hold a degree equivalent, however FASEA determined that the only degree that would be approved would be that of financial planning.
“That’s not what legislation requires, the legislation requires a degree equivalent,” she said.
“So, our concern is that we have highly qualified, highly educated people who come with degrees that are absolutely suitable for our industry, but they are not being approved under FASEA. Our view is that given the legislation requires a degree equivalent we are hoping that the treasury will actually understand that those degrees are the right degrees.”
Fox said that she agreed that everyone would still have to do ‘an additional unit in ethics’ but if they already started economics, finance, commerce and business, then those degrees from the top universities, which have been approved by the national education regulator, should also be approved.
“It should not be appropriate for the retail investor that the only degree that is approved is a financial planning one,” Fox stressed.
Also, she said that given that the FASEA would be wound up and the standard setting would go to Treasury under ministerial authority, it would be the minister to be able to determine the degrees that were suitable for the industry and could be approved.
“It does not need to go back before parliament because the legislation says a degree equivalent,” she reiterated.
“Those degrees are suitable for different forms of financial advice and can be approved by the minister and that can be done through the Treasury.”