While experienced financial planners may be exempt from educational requirements in the future, it is still a worthwhile study as a minimum standard can help build client trust.
It was proposed last year that advisers who had worked in the industry for 10 years would only have to complete an ethics bridging course instead of the full educational requirements.
Speaking to Money Management, Michael Miller, financial planner at Capital Advisory, who had more than 10 years of experience, disagreed with the plans.
Research by the Australian Securities and Investments Commission had found there was low trust in financial planning profession, which he felt was exacerbated by the lack of educational standard.
People felt more comfortable and trusting, he said, if they knew an adviser had met certain educational requirements.
“There is that hurdle to overcome before people feel comfortable with you and that takes time and increases the cost of providing advice. If people have that evidence that a minimum standard has been reached from the beginning, that removes the barrier and helps to build rapport with the client.”
In a written submission to Treasury, he added: “I support having an education standard that requires a portion of formal study for existing financial planners as well as new, so that consumers can reasonably expect any financial planner licensed in Australia has undertaken a reasonable standard of formal education. I support this standard as a reasonable effort on behalf of experienced financial planners, for the benefit of consumers and the profession”.
However, Miller welcomed modifications to the educational pathways to broaden the range of subjects related to financial planning.
This was expected to benefit those professions where financial planning was not the main task such as stockbrokers and insurers. These sectors had already raised doubts about the relevance of the Financial Adviser Standards and Ethics Authority (FASEA) to their work.
“What is being proposed is that people can still meet the educational qualifications by studying related areas such as commerce or business. This is less prescriptive now and these areas are more relevant to their jobs and something they may want to study or to expand their skills.
“Before, people were willing to do the study but they didn’t necessarily feel it was relevant or broadening their knowledge.”
Miller encouraged other planners to make their own submission to Treasury, even if they already passed the FASEA requirements.