Lack of clarity around the transitional arrangements for 22,500 existing financial planners, in light of the Federal Government’s move to impose new minimum education standards on new planners, could risk them exiting the industry, a financial services training provider said.
DeakinPrime said it supported the Government’s plan to lift the professional, ethical and educational standards of new advisers by requiring them to hold a degree, but chief executive, Simon Hann, warned the uncertainty for existing planners could set the reform agenda back.
“Our research shows that around 75 per cent of existing financial advisers do not have a relevant university degree. Most just have the basic (Regulatory Guide) RG146 qualifications.”
In its response to the Financial System Inquiry, the Government said it would consult on transitional arrangements for existing advisers, and an independent, industry-funded body would set the details of the new standards, which would be recognised in legislation.
But Deakin University financial planning and superannuation senior lecturer, Dr Adrian Raftery, said waiting for an industry-funded body to be formed increased uncertainty.
“The risk is that the industry will have to sit on its hands until an independent body is formed and meets before any decisions are formally made, endorsed and enforce,” he said.
“That’s at least another year of uncertainty and perhaps longer — a year when advisers could put to use by working towards the necessary qualifications.”
