AIOFP criticises unsupportive younger advisers

The Association of Independently Owned Financial Professionals (AIOFP) has criticised younger advisers who do not support Labor’s proposed education exemption for older advisers, accusing them of being the “Christmas Grinch”.

Shadow financial services minister, Stephen Jones, announced Labor would grant an exemption for advisers with over 10 years of experience and a clean track record from the tertiary education requirements, which had found support from industry bodies.

Peter Johnston, AIOFP executive director, said he was disappointed by the reaction from younger advisers who did not qualify for the exemption and had done or were required to do the education requirements.

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“It is unfortunate that some elitist younger financial advisers (EYFA) cannot find any compassion or patience for the older adviser who may not have had the opportunity for a traditional university style of education but has life experience, arguably the most important qualification to have,” Johnston said.

“How many times do you hear university graduates say ‘most of what I studied at uni has no relevance to my career’ – it is the subsequent university of life training that makes them successful and relevant in their chosen career.

“That is why new entrants have at least 12 months of training before being allowed to give advice to consumers, the curriculum content they studied for over four years is largely irrelevant.

“The EYFA fraternity should stop being the Christmas Grinch and demonstrate some respect to experienced advisers of all descriptions who have been the backbone of this industry for over 40 years and have performed to a high level.”

Although he said he supported the Financial Adviser Standards and Ethics Authority exam, it still needed to be re-worked next year under the Australian Securities and Investments Commission (ASIC).

“Whilst most theoretically agree a FASEA exam is a good idea it is time to adjust its original objective and reflect that in the exam content,” Johnston said.

“It must move away from trying to intimidate any adviser out of the industry to being specific to the adviser’s field of expertise and testing the relevant ethical/technical information.

“It also needs to be set by an industry panel not an academic who knows little about our industry.”

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"Elitist" - are you for real?!? I am in my late 40's, a single parent to a child with significant disabilities and have completed all of my studies. I think you have it the wrong way around.

The "experienced" advisers who are older and can't find the time to study are the issue. How offensive! You always find time for things that are important and see benefit in. Most of the older advisers I give coaching to are arrogant enough to think that they are above needing to learn anything new. Some of these "experienced" advisers are the reason our profession is being treated like this.

That's cute, he included elitist in an acronym to bunch everyone together. The same people thumbing their nose at doing 6-8 subjects of the grad dip in the ~8 years they will have had to do it are going to be the reason we can't progress as a profession. It's not to say that they're bad advisers or unprofessional, but the reality is the advice profession needs to lift to a higher standard so that we can reduce the onerous, productivity killing compliance burden. The reason people don't want grandfathered advisers that don't meet the new requirements is that it will be a lingering point of weakness in the move towards a profession based more on trust and personal consequences, where we can start shouting that it's time to cut the red tape. It's the same motivation behind a generation of younger advisers shunning the CFP; grandfathered CFPs not held to the same standards as new advisers just introduced confusion and uncertainty about what the title even means.

If everyone is held to the same standard then everyone is treated the same, then we can say "look what we've done, look where we've got the advice profession to, look at the effort put in by all participants and the stakes for doing the wrong thing. Can we do away with the ridiculous level of disclosure and compliance burden so that we can all see twice as many clients yet?"

This is a carrot that Labor is dangling there to help a small percentage of advisers hang in there for 5 more years, but it will contribute to stalling the next step which will allow the profession to be something that the younger advisers want to stay in, and maybe even attract new entrants.

I've worked with about 40 young advisers (23-35) in the last 10 years and 4 of them are still advisers. The others loved the job and met all the requirements, but were driven to other roles because the onerous process of providing advice meant that the stress didn't stack up to the money when other possible jobs were factored in. Some are analysts, some are mortgage brokers, some went into non client facing management in non-wealth businesses, but all would have liked to stay in advice if the job wasn't such a nightmare.

Even successful advisers aren't happy with the state of financial advice, doesn't that day that things need to change rather than hanging onto what was?

My father always said "many people say they have 10/20/30 years of experience, when in fact they have 1 year of experience duplicated 10/20/30 times". The notion that just because you've been around for 10 years means you are appropriately qualified is just as ludicrous as saying a degree makes you appropriately qualified. What about the person with 9.5 years? 9? 8? Are they completely useless?
The "university of life" is only any good if you actually learn something decent from someone competent.
Talk about hypocrisy - Peter is being very much an elitist from the other direction i.e. experience trumps all children. Just because you've existed longer means you don't have to do any study, but the young person coming up doesn't have the same opportunity. Seems super equitable.

AIOFP = Ailing, Infirm, Old, Financial Planner’s ?
Makes sense

I became an adviser at 40 in a major career change. I quickly realised that the education requirements that let me advise were terrible so I hit the books and completed the CFP and a few other qualifications. I hate studying, but while my wealthier now complaining colleagues were taking long holidays and counting their large commissions, I was in the office on weekends getting properly qualified.
In a brief stint with one of the banks I spent a lot of my time answering very basic questions from my colleagues every day. These were the adviser making the most money but they had no idea on anything other than how to maximise their pay cheques. Interestingly quite a few of them are now banned for life or out of the industry all together.
When the new changes were announced I was as unhappy as anybody given the prospect of having to do another three subjects in my mid 50s but here I am two down and one to go. Another friend of mine has already completed 6 subjects for the new requirements.
You can sit there complaining and wringing your hands at the thought of losing such a lucrative income source or you can bite the bullet and get on with it. I choose to pay the price and still be there at the end of this, with less competition. Voting Labour is a very poor solution.

It's not just young advisers, those who already have the quals have every reason to be upset. Our education standards will continue to be a source of ridicule under labor's proposal. If they had half a brain they would have promised something much more subtle. Such as 3 years of CPD = 1 subject credit, a dfp = 1 subject credit, 2 for adfp, 5 for cfp via coursework or a related degree etc. A similar outcome could have been achieved without trashing the new higher standards. But at least Labor are listening. If they make genuine promises to reduce red tape there will be a more united front.

The statement most of what was studied at uni has no relevance may be correct for some degrees (e.g. Arts), but I can tell you that most of what I studied as part of my Master's degree in commerce (financial planning) was and continues to be extremely relevant to my role as a financial adviser. For the record, I am one of the older advisers. I also meet all FASEA education requirements.

University isn't just about what you learn, it's about putting in the effort and time to achieve something that develops you as a person academically and personally. I'm sorry, but if an older adviser cannot do 1 unit per year (would have been even less if they'd started in 2018) to develop themselves professionally and academically I do not think they should be allowed to continue in this industry. Why are older advisers so quick to have a woe is me attitude about things as they sit on their gilded thrones paid for with decades of contribution fees, egregious commission rates and a lack of any form of compliance for the majority of their careers?

You are all so quick to claim that it was vertical integration that was the problem all these years, or maybe it was the professional associations, or maybe it was the banks and insurance companies. Instead the majority of you have been putting clients into super funds and investments with fees double and triple that of what is reasonable, whilst charging 1% p.a. for the pleasure. Clients have been put into underperforming active funds year after year only to be traded annually as a way to justify the fees being taken.

As a younger adviser (not a boomer), I see this industry primarily as a large scale example of the dunning-kruger effect, whereby all of you think you know much more than you actually do. This is where the arrogance of not needing to study comes from. You think it below you.

This industry needs a clean out. Will some older advisers get burnt? Sure. Should we care? I'd argue not really considering the rent seeking behaviour most of these people have utilised in their decades as "professional financial advisers".

Mr Johnston should stop pandering to lazy boomers because the membership base of the AIOFP will only reduce in the years to come. Look to the future, be progressive and don't take a stand on behalf of the status quo.

I'm 52 and don't support Labor's proposal Peter. To be a profession we first need to act professionally. As head of the AIOFP you should act that way. It seems you live in an echo chamber and surround yourselves with "one side" of the argument. Maybe that sums up your constituents? If not, perhaps you should be more balanced.

Where is the evidence to back this article up?

Labor & the industry bodies are missing the point - this is the 'clean-break' that finally permits financial advisory professionals to have the elite status they deserve. Sorry, but appeasing these half-baked, hang-on's would needlessly continue the industry to be incomplete for another few decades.

What the anti-education minority are communicating very clearly is that they clearly don't know, what they don't know.
Apparently empty vessels do make a lot of noise (Politicians take note!)

My authority is that of a 38 year industry veteran (age +65) where completing FASEA and seven units of a GDFP saw me nail it over the last 24 months.

To get myself up to pace... I merely embraced the discipline of daily study sessions from 4am to 8am, prior to putting in the usual business day. Try it - you'll like it.

It's a sad joke when the complainants say they already know all that is needed. If that's truly the case, then completing studies can't help but be a 'walk in the park'. If the nay-sayers are as clever as they claim, then getting their Qual's will take minimal effort whereas if the opposite is the truth... then obviously someone's doesn't want to have their deficiencies exposed.

FACT - the only areas that demanded my greater effort were where my deficiencies were rightly tested.

I would be very happy speak out against Stephen Jones / Labor's vote catching ploy and my industry peers who remain recalcitrant towards their own betterment.
So guys, hurry up and take the bitter medicine, get the yummy lolly afterwards and thereafter life is very sweet.

I agree Labor's policy is rushed and counter productive. But at least the ALP is listening and trying to help. They have woken up and realised many thousands of influential, traditional coalition supporting financial planners are willing to vote Labor. This is a very good thing. Being a lock for the coalition got us to the current state of affairs which is completely untenable.

Buy that man a Beer.....thank you Mike on behalf of Australians and Advisers for the investment in not only yourself but also your industry, your clients, your business, and your peers. It's just one small step, but it's like a pebble rolling down a hill. It will leave a lasting legacy. Perhaps your investment may be an inspiration. ..Bloody legend & well done.

Spot on Mike. What a lot of the half wits have already forgotten is Labor had no issues supporting the Government on adopting all points of the RC. As you, I'm +3 decades and at 59 did my Grad Dip and at 60 my Masters. FASEA was done as soon as the first one was available to book. Add to that running an AFSL. Slight difference to you is my study was 6-10pm. Don't know why this continues to be a topic. Pull the rotten tooth and let's get on with business.

I Love Youse All

As an adviser that this Labour proposal would benefit, I think that if they do go down that track, 10 years is a bit on the light side for an exemption. If you are one of the 'older advisers' that is having trouble with exams, it is very likely they have been in the industry 20 or maybe 30 years, or more. Anyone starting in the last 15 years has had to do some level of formal study, so that excuse of not being able to pass exams doesn't really stand up. IF and it's a big if, they bring in the exemption, maybe make it for 20 years of experience and make it fit for porpose.
Before anyone bags my fence sitting opinion, I'm doing the Grad Dip and have nearly 30 years experience, so it won't affect me either way.

I am not supportive of this change. The dye is cast. I am 60 years of age and supportive of the degree proposal regardless of experience. Sure I came to the business 32 years ago with two degrees and undertook further studies because that is what you have to do if you want to become a "professional". Its not just academic and its a combination of life skills and academia. But you need both. Its just too late now to turn back the clock and the reality of the situation is the ALP is only adopting this position because they are flagrantly seeking votes. We need to get the IVY League universities in this country to start offering Financial Planning as subsets of their commerce and economics degrees. rather than being held hostage by a small number of tertiary providers as is the current situation.

Ok boomer

In the past these Advisers may have had an excuse, but with this minimum standard now being only 6 units, cost wise significantly cheaper, and a time commitment equivalent to washing their BMW on the weekend (probably earned by Nil entry fees and the blood of often independent Advisers)... it very much reflects a level of behavior that signifies these Advisers should now leave the Advice industry.

A basic educational level doesn't guarantee ethical or eliminate shonks but it's part of the responsibility that needs to be in place so Australians can have faith in the advice they get. Professionals find (no make) the time, not for themselves but for their peers and Australians. Professionalism leads to self regulation and lower Government intervention. Education signifies a dedication and commitment to your industry, your peers and those that come after you. .. 50% off course fees, minimal time commitment and exemptions, why wouldn't you do the minimum?

As one of the younger advisers, I'm quite torn on this. I accept that there are great older practitioners who have provided an excellent service to the Australian public that are getting a raw deal from the legislation which asks them to undertake a lot of education with a limited time horizon to recoup their investment...... or still be able to practice in something that they care about... or whatever reason.

At the same time based from my personal experience, the adviser cohort who I feel is most dangerous to financial advice not becoming a profession is unfortunately the older advisers.

I hate to say it but there are some older advisers out there who are complete and utter plunketts. Why would I say that? Because these people continuously demonstrate to me that their regard to the Conflicts Priority Duty is questionable.

There are some who have no consideration to increasing professional standards and still "Cry for Argentina" over trail commissions on super products. To me these people are Philistines.

I get the issues of equity - but I feel that watering down the legislation to exempt some based on experience dilutes the hard work of meeting education standards undertaken by everyone else and will act as a drag on the profession continuing to move forward.

This exemption does not seem to be an effective 'sieve'.

The AIOFP has been making some very good arguments lately, but this one I'm struggling with.

To suggest that I might be an elitist because I might not agree is unfortunate use of language by the AIOFP and only serves to alienate me.

You could have said that you are disappointed, you didn't need any more descriptors to make your point.

Anyhow, I guess in a lot of ways Gen X, Gen Y and the Millennial generations generally hold an intrinsic belief that they have been shafted by Boomers and this argument feels to be an extension of that. I do accept that the word 'some' was used before the word elitists.

If indeed the AIOFP finds my position regarding this "elitist"..... My response to this is: "Ok Boomer".

Wow. The AIOFP and Peter, what an embarrassment.

I'm v late Gen X. This is my 25th year in the industry, I joined as a grad paraplanner. Its been blatantly obvious since 1996 that qualifications were needed to manage people's money. I have utmost respect for the product skills of a riskie, but come on. In my time we've had the FSR/CLERP changes, FOFA, FASEA reforms and the RC.Plus three wholesale super changes: RBLs, then 2007 now 2017. If you couldn't anticipate at least 15 years ago formal quals would become the requirement, or simply sat on your hands when the FASEA reforms were announced years ago and hoped that by bleating loudly enough you'd be exempted - well who are the entitled ones?

I came to the industry with an undergrad degree, now have a Grad DipFP, CFP and a MFP. Plus other industry-centric quals. I also did the full CFP program - it wasn't handed to me from a cornflakes box. All while working full time with family responsibilities, health issues blah blah.

The arrogance that the very same cohort of people that created the need for the FASEA educational reforms are still whining about having to tidy their nest is breathtaking. As I said, I was around in the old days.

Register sitters who were proud to take 1% or more commission for doing absolutely nothing but swan into PD Days with their thick gold chains and brag about the next yacht they were buying. Who got drunk and heckled the staff doing the PD presentations, or simply napped the afternoon away. Who couldn't even answer the most basic technical questions so had to bring their junior (ie. me) into meetings so I could basically do their job for them. I wrote the SoAs and presented the technical side and answered questions. The adviser made small talk at the start and end. I'm not an isolated case, anyone of my age who joined when I did as a grad paraplanner had the same experience. There were so few of us then and we all knew of each other, either directly or via one degree of separation. The same lazy advisers that spent their time playing golf and drinking at the clubhouse while supposedly networking (yeah sure, funny how no new biz came in thru those channels) who treated youngsters and especially women with utter disdain.

Then the others who churned, or took a whopping entry fee on managed funds (they were up to 5% then and only Asgard really existed as a platform) plus also took an ongoing trail. If a client got a printed portfolio valuation from Visiplan (as XPlan was called then) as a 'review' they were lucky.

Some may say the clients then should have agitated for something different. But how could they? The clients back then were mostly 'silent generation' or the very first wave of boomers. Who were private so didn't discuss their advice affairs with friends or family to get contextual perspective, nor challenge the authority of so-called experts. That was who they were. There was no internet back then, so financial advice-centric information could only be sourced from one place: the adviser. Who was trusted. Because they were the 'experts'.

That the same people that took advantage of the goodwill of those who had no option but to trust them, who are the architects of the terrible reputation the industry - get with the times or get out.

In the last decade I've come across so many brilliant, well educated, talented younger advisers emerge, who have sublime soft skills/EQ who genuinely want the best for their clients. The industry is in very safe hands. Your presence won't be missed.

So Labor takes a pitch at winning a few votes from a disgruntled minority, Big deal. It must be a slow news day so lets publish something from Peter to get things moving. Peter, occasionally you come up with some good points but just when I thought it's time to switch from the FPA you come up with this one. Now I'm elitist? 60 years old, advising 30+ years self employed and self licensed, sat and passed the first FASEA exam, knuckled down and bit the bullet to pass the Grad Dip with only the Dip FP behind me and now I'm elitist? I agree with the young planners. I think if I just put in 4-5 years to be a planner, I would be pretty miffed to see someone like me step to the front of the queue. Those of us with experience should lead by example, and that includes FASEA and education. Only so can we mentor while also having the empathy to understand what a young person has just gone through to get to this stage.

Peters words in the article are prescient. He knows the score. Period. Millennial Whingers of the world unite.

"Millennial whingers of the world unite"

Umm, pot calling kettle black much?

No, not at all 'optimist'. No pot-calling going on here whatsoever. Just saying that most if not all Peter's comments are based on cold hard provable facts. The people saying otherwise have been offered opportunity after opportunity to debate him in open forum. All have fallen silent to this call. They've not shown the conviction of their shouting. Speaks volumes. The facts care not for your opinion or mine. They simply are.

Can I just congratulate the comments section for largely staying constructive and attacking the ball and not the man.

Really, pretty poor form by the AIOFP here. You have to look at this and wonder if you want that representing you as a professional.

Peter - please take your days of big upfronts and ride into the sunset. A profession doesn’t have carve outs. My doctor wasn’t grandfathered his ticket. The fact you’re also arguing for the FASEA exam to be skills based shows you really don’t understand what the reform is about. The exam is theoretical so that in the end, every single adviser is fully aware of the law that supports our industry. Once the law is universally understood, they can start treating us like adults. You’ve had 8 years to do 6 subjects on top of a pretty soft DFP back in the day - some were even open book multiple choice for God’s sake. I fear for the younger advisers if the exam focuses on trail commissions.

ElleJay, no Financial Planner would ever get out of bed for the "big upfronts" anymore - I forgot to thank the reforms for increasing our fees - well done.

You might want to re consider your statement on your Dr. Depending on the Age of your Dr, they may well have been through a different qualification path to a Dr who is qualifying today.

First my trailing commissions get stripped from under me and now there is a shimmer of hope that I don't have to do a degree after all that I've been through! I'm getting real sick and tired of the extreme privilege coming from this elitist group that clearly had no idea what it felt like to be part of Storm and then recover... only to be pushed back down again! Next they will want full disclosure of my history!!! Not happy Jan.

It is not elitist to be in favour of higher education standards. Most of the younger advisers I associate with have a great deal of compassion for older advisers and they are united in their belief that FASEA went way too far. We just don't want to become a laughing stock again with the media joking that hairdressers do more study. Giving more credits for years served, related quals, cfp, dfp etc. would be much more sensible and in many cases could achieve a similar outcome without embarrassing our profession and leaving us open to more ridicule. I suspect the coalition will do something like this when FASEA is wound up. But this is all a side show. The real enemy is ASIC and the insane compliance and red tape regime. This is where lobbying efforts should be directed.

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