Advice standards need focus on softer skills
There is a considerable deficit on the practical management of an advice client in current professional standards and competency matrixes, which places greater emphasis on technical skills and competencies, according to the Beddoes Institute.
Beddoes Institute director, Dr Adam Tucker, said the existing professional standards and competency frameworks were robust in describing requirements around technical skills from a financial adviser but said this was insufficient.
Tucker was referring to the findings thus far from research undertaken by the Beddoes Institute to gather industry-led evidence from advisers and licensees, both institutional and non-institutional on what form the new education pathway for financial advisers should take. The Association of Financial Advisers (AFA) engaged the Beddoes Institute to undertake the research, in partnership with Asteron Life and Kaplan Professional.
“Almost everyone sees the large deficit of existing competency matrixes on the practical management of a client. So those skills around communication, conducting a review, non-verbal communication, behavioural psychological aspects of how we think about investments and succession,” Tucker said.
The purpose of the research, according to Tucker, was to formulate ideas on the kinds of qualities an adviser should possess or develop, such as knowledge, skills, abilities, attitudes, and behaviours.
“And it’s those qualities, if you like, that we’re looking to describe in a comprehensive framework, incorporate in the existing frameworks and then put them in a very applicable or implementable formats for educators, for people who are sitting exams, people who are considering new standards,” Tucker said.
Tucker added the research would not delve into the specificities of the exam or what exams advisers should undertake. Rather, it would concentrate on the qualities advisers should possess to improve the quality of advice.
“Those are the things that, for example, the supervisors in the first professional year will need to be looking at to see whether a young financial adviser has that knowledge or whether they are exhibiting those attitudes or behaviours or they have those skills in practice,” he said.
AUTHOR
Malavika Santhebennur
Recommended for you
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
