The Government’s education proposal is “really good common sense” and will help curb clients being orphaned by a further mass exodus of financial advisers, the Stockbrokers and Financial Advisers Association (SAFAA) believes.
The ‘experience’ pathway would allow advisers with 10 years of experience to be exempt from completing a degree to continue practicing.
SAFAA chief executive, Judith Fox, said it was the intent of the legislation to take prior learning and experience into account but that it was the Financial Adviser Standards and Ethics Authority (FASEA) that did not recognise the value of decades of continuing professional development.
“We think it’s really good common sense that if you’ve got deep experience, you’ve had clients, you know, for a long period of time, you’ve got an unblemished record, you’ve passed the national exam [to be exempt],” she said.
“It also means the clients aren’t going to be disadvantaged because they’re not going to be orphaned by a further mass exodus of advisers.
“It’s a transition issue because those coming into the industry now will all have a degree. If we had a further mass exodus of experienced stockbrokers and investment advisers, it’s just going to exacerbate the current problem, which is that we have an unsustainable advice sector and that has implications for retail investors.”
Fox noted she understood there were some advisers who had already done the study and might have felt the exemption devalued their effort but said that relevant education was always valuable where advisers and clients were the beneficiaries.
“Financial planners want to be recognised as a profession and I do understand that people really feel that somehow these changes are going to mean that they’re not going to be recognised as a profession but that movement doesn’t happen overnight.
“It is something that takes place over time and every new entrant will come in with a degree. But the idea that we would just see a further exodus of experience means no one can mentor the next generation.
“For stockbrokers in investment advice that mentoring is key because they’ve gone through the Asian Financial Crisis, the market crash of 1987, the Global Financial Crisis, so they’re exactly the people you want in the room when the next market correction hits to mentor the next generation.”
Fox said that kind of experience was not learnt at a university and that the industry would want to keep its experienced advisers during this transition period.
“I think people are angry because they think somehow that they’re going to be not seen as a profession, but that is taking place and the professionalism of all parts of the financial advice industry is obviously underway,” she said.
While Fox said SAFAA was supportive of the proposals as they stood and were open to suggestions of what other associations would put forward.
“Part of the challenge is that FASEA took a one size fits all approach but the financial advice ecosystem is very broad as it incorporates a whole range of different financial advice services,” she said.
“Unfortunately, I think we’ve seen a one size fits all approach just doesn’t work and that creates a challenge for Treasury. But I think we’ve all seen how a one size fits all approach is not helpful.”
