Degree equivalent won’t professionalise sector

The proposed legislation around raising professional standards in financial services should specify a Bachelor in Financial Planning rather than degree alternatives, financial services training group, Mentor Education, said.

The group's chief executive, Dr Mark Sinclair welcomed the Government's focus on raising academic standards but said exemptions for degree equivalents would defy the purpose of improving financial advice for clients.

"Every other profession in Australia — accountants, doctors, physiotherapists, nurses, podiatrists, and business managers etc. — have their own 24-subject Bachelor Degree," he said.

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"The proposed legislation needs to specify a ‘Bachelor of Financial Planning' rather than the nebulous reference in the legislation to a ‘degree alternative" or an unrelated ‘Bachelor's degree', such as a Bachelor of Commerce with a small number of financial planning electives."

The comments came amidst a survey of over 500 financial advisers, which revealed that over 74.3 per cent believed a 24-subject Bachelor's degree in Financial Degree would be more effective in boosting professionalism while only 25.7 per cent believed a degree equivalent would be effective.

Over 80 per cent supported the requirement for advisers to complete a Bachelor's Degree or an equivalent qualification or a national exam.

However, one in five did not see the value in a Bachelor's degree for advisers, while 10.9 per cent did not think advisers should be required to complete a year of work and/or training.

Over half (55 per cent) believed a degree in financial planning would professionalise the profession, while 38.7 per cent said it would help overcome negative publicity of the profession. Almost no one believed it would increase advice costs.

The survey also pointed out that aged care was not currently a subject in any Bachelors or Master's degree in financial planning despite the growing ageing population.

Over 30 per cent of respondents said they currently provided aged care advice while 22.2 per cent who did not do so now intended to provide it.

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As an old dinosaur currently without a degree, I totally endorse Mentor Education's observation. I wouldn't see a Doctor for the flu whose degree was in 'related' area of study such as Osteopathy or Physiotherapy, so why would we think Degrees in Economics, Commerce etc would professionalise our industry?

Of course, there still needs to be recognition of prior learning and experience and sufficient lead time to allow current advisers time to qualify under the new regime.

Degrees in Economics would certainly help financial advisors. After all, it is 'the economy stupid' as the saying goes. Understanding how global and domestic economies gives clues as to what is going in industries and what is effecting the businesses operating in their industry and what they are buying in and selling out of the firm.

Financial advisors who do product shopping of offerings by the financial funds and rely on the advices of those financial and investment companies are doing their clients a disservice in their investment advice and recommendations.

To some extent at present there are no respectful degrees in financial advice on offer (I am happy to be corrected) but hopefully that will change.

I agree that 'relevant' qualifications have to be relevant to the professional of financial advice and I am concerned that tertiary providers will boilerplate something to sell.

The need for adequate lead time for financial advisers to become 'qualified' is necessary. It will be disappointing if prior industry training and education is not suitably recognised. I believe that the situation is not so serious as plenty of financial advisers have tertiary qualifications that can augment post-graduate study relevant to financial advising.

My accountant hasn't even reminded me to buy up big before the end of this financial year for anything work related. All he does is write history. Financial Planning advise? You must be kidding. Nice bloke but.

Your accountant is an accountant and doing what an accountant does. Do you get financial advice from your doctor?

My point is not to denigrate my accountant or any accountant, but to point out there can be a massive gap in knowledge or ability with someone who has theoretical 'equivalency' when it comes to offering financial planning advice.

Yes I agree re your point on 'theoretical equivalency'. A good financial adviser is best placed to help his or her client through the combination of having: the good understanding and interpretation of the client's circumstances and needs; a competent understanding of the foreseeable economic drivers in marketplaces; and detailed knowledge and skill in knowing the investment options, products, ways and means, etc. It is lot but a professional can do it.

I support the concept of a ‘Bachelor of Financial Planning' as this will add credibility to the fact that financial advisors are professionals. This will be in line with other professional degrees. Engineers have Bachelors of Engineering; lawyers have Bachelors of Laws; doctors have Medicine, etc, etc.
The independent financial advice industry and its professionals need to embrace this degree.

This is all about getting the balance right. I've seen enrollments by younger students into financial planning courses drop by two thirds over the last five years, and I relate that to the negative perception of planners created by the industry, themselves & mainly the media (even MM to blame). Are there any Advice firms out there that would employ a 20 year old, fresh out of Uni after completing their Bachelor of planning degree and put them in front of clients? Probably only a few accountancy firms, getting instructions from the 60 year old partner, but that's a different story, . The FPA have a good model. A broad based finance degree in finance, accountancy and or economics provides a broad level of experience and then combined that, with an internship, higher education at the Graduate level should be the minimum. but Non of this advanced diploma rubbish...That way we'll leave the door open to attracting a far greater amount of individuals into the industry, whilst requiring minimum education with tougher specialized Graduate level requirements. Certainly, not requiring the outlay of thousands of dollars for a Degree.. We've got enough worries as it is, yes increase education definitely but we need to be careful as to how we do it.

Interesting what you say. I hope young people do keep coming into the financial advice industry. Their take on the new industries, new consumerism, new technologies can balance the older folks's familiarity with traditional industries and products and this means more considered advisories. Young financial advisors need to take notice of their older colleagues' experiences with economic upturns and downturns.

Financial planning is not that hard -is there even enough content to fill a true FP degree?

Disclosure: I'm a CFP and have worked in planning for the past 13 years.

I know plenty of CFPs (and non-CFPs) that offer very basic, low impact advice. Perhaps you are one of them, maybe you're not. If so I do agree the advice you provide isn't that hard because its not really complex financial planning.

However, if your providing advice on things like large company buy/sell agreements, working on trust/bucket company strategies, complex SMSF, philanthropy or Estate planning strategies then there is plenty to it.

After many years in the industry I am still yet to sit down with a client that is doing everything right so I guess it can't be too easy.

Spot on Reality, recently I have been moving into that area, and I tell you its not easy or simple work at all. Its not a simple super rollover, its ownership structure, shareholder agreements, buy sell agreements, cross ownership, trust ownership, super ownership, family trusts etc etc etc, really complex but really interesting as well. Is there enough to fill 24 subjects for a FP degree? Yes for sure with economics and finance subjects combined and Advanced DFP and SMSF Aged Care and others there is a degree right there. I assume DFP and Advanced DFP will no longer be relevant as some time.

Spot on TJ - there's lots of legal stuff that a financial advisor needs to be across.

I do all of the above plus some. I still don't think it's that complex.

Anyone who claims to know all the answers doesn't really know very much. If you actually provide advice in all those areas (plus some!) and cant see the complexity then I seriously question your grasp of the topics.

I guess my point is a newbie won't be discussing those topics straight out of uni [if ever]. Therefore would there be enough content to cover a basic FP degree? Keeping in mind that a Cardiologist doesn't study that speciality in his basic med degree.

DFP + Degree= Let them complete MFP which is happening already.
DFP+ADFP= Equals to half BFP then bachelor of Financial Planning in 1.5 years
DFP +5years experience do graduate certificate of FP then MFP
Relevant degree should get credits and complete the gap via BFP or MFP
I have seen still people are just Tier one like in super funds or even they are directors of AFSLs even they knowledge can be credited to BFP or upto MFP.
Financial Planning sector must be Professionalised via actual FP degrees and DFP ,ADFP will be always relevant as who are school drops outs have a chance to become FP.
But Sufficient time must be given .
And all Financial Planning must be commissions + Advice fee based otherwise industry wont be balanced.

And Financial Planners must be able to advise ,recommend ,review Health Insurance as well in SOA so but if people dont qualify for Life Insurance products.

(Personal Opinions dearies )

Gurdial Singh
DFP+ADFP thinking to do MFP who does not believe in Financial Planning Bodies and their diesignations

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