Is an adviser ‘finishing school’ an answer to PY burden?

A financial adviser has suggested the use of a financial advice ‘finishing school’ to relieve the burden of the professional year (PY) from advisers.

Super Innovations principal, Joseph Climi, said a finishing school would provide robust regimented practical training for soon-to-be advisers along with an allegiance to an oath of duty, similar to lawyers and doctors.

Climi said those who completed the training would be more well-rounded and practices would be more encouraged to take on advisers, which could lead to less compliance during the PY.

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“They’ll reach a competency stage where they can leave the course and hit the practices running and they won't be this massive burden of practices to go through the compliance over a 12-month period,” he said.

“There might be a three-month period of supervision to make sure that because the college will give them a more rounded education in insurance investments, and estate planning, and so forth.”

Climi said because small practices either did insurance, investments, or a mix of both, PY advisers were not all-rounders unless they did their PY at larger practices with four or five advisers.

“My belief is that we better tackle the PY year now and get the young ones in quick smart. In 2026 it’s going to be another bloodshed,” he said.

“Because if we don't who wants to go into financial planning? For one, they won’t have a good career path, no respect at the moment until it builds up in later years, and are unsure how much they're going to get paid.

“The other thing with financial planning is it is not just insurance or investment as it is so broad. There are so many components and intricacies that exist, how can you expect an individual adviser that's been in the industry for 20 to 30 years to teach them all that stuff?

“They’re only limited to a certain level of experience and that's what they’re going to teach. These advisers need to be taught right across all spectrums and to be wary of the traps that are involved when they get out there.”

Climi said if a training school were brought in, it would be a “big relief” for existing advisers and perhaps the 12-month period could be reduced to around three months as it would complement what they already had in place.

Climi said he had taken the idea to the Financial Adviser Standards and Ethics Authority (FASEA) that said it would pass it onto Treasury. However, he noted that the idea had likely been put to a committee but had been stalled.

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I don't understand all this concern about "insufficient" advisers. Government and regulators have a clear preference for consumers to get financial advice from advertising and sales reps rather than professional advisers. Regulatory settings are designed to shrink the market for professional advice, and force consumers to go it alone just as they do with property. In spite of FASEA losses and PY barriers, there will still be more than enough professional advisers available to service the reduced market size.

Universities should actually be closing down their undergraduate financial planning programs. There is no need for the volume of graduates they provide, and younger people without broader work and life experience are ill suited to professional financial advice anyway. Financial planning degrees should be graduate level only.

"younger people without broader work and life experience are ill suited to professional financial advice anyway"

This is such a dangerous, regressive way of thinking. You wouldn't say this to a young doctor, lawyer, teacher or pretty much any other profession. Age is never a decider of ability or lack thereof. I have met many advisers and the younger ones clients I believe would generally get a greater level of service and expertise. Experience is beneficial sure, but this sometimes comes with unwillingness to adapt and progress which is a net detractor to clients.

Any young adviser with a suitable degree, perhaps some post grad study and generally about 5 years of industry experience is just as likely to offer a great client experience than any one their senior. We need to stop perpetuating the myth that older clients do not take younger advisers seriously as this has not been my experience or any of my colleagues.

I think you're missing the sarcastic nature of Anon's comment.

The simple fact is that if they want advisers with 20-30 years' experience to help with the PY, they're dreaming, because those advisers are being thrown out with the bathwater... and even if they get through FASEA, most are unlikely to be around after 2026. Certainly ironic in my view. :P

Yes definitely noted the sarcasm in the initial points. I assumed, perhaps wrongly, that the comment I referenced was not in jest.

"Experience is beneficial sure, but this sometimes comes with unwillingness to adapt and progress which is a net detractor to clients."
So you are basically saying inexperience trumps experience. Amazing logic right there.

No, that wasn't my argument at all, way to strawman.

My argument is that experience does not always come with competence. Older advisers with many years of experience sometimes suffer from the the things that I mentioned which can impact their effectiveness.

When I was a young adviser, I was critical of an older guy who despite being in the industry for decades appeared to know nothing. 15 years on I was much less critical! The amount of change is crazy and the "unlearning" of previous requirements, laws, limits etc is the difficulty in trying to keep current. So I agree, experience definately has merits but also its own challenges.Fresh out of uni you only know and only have to remember what is current.

"When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished at how much he had learned in seven years."
Now who said that?

It is my understanding that you are able to accelerate the first two quarters of the Professional Year depending on your level of experience. But this does NOT shorten your Professional Year, which must be a minimum of 12 months ... so you would spend more time in quarters 3 and 4.

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