The Financial Planning Association (FPA) has recommended a range of reforms to education standards and practices as it tries to raise the bar on new entrants and restore consumer faith in the advice industry.
In particular, the FPA has called for all new entrants to the industry to be degree qualified in financial planning as a minimum requirement by 2015.
FPA chief executive Jo-Anne Bloch said the association “no longer has confidence in the barriers to entry for financial planning” and as such is recommending an overhaul of the existing education system.
The FPA has released a consultation paper in which it recommends a number of changes to the education requirements of financial planners.
The recommendations include:
- A minimum level of tertiary qualifications in financial planning for all new entrants by 2015;
- By 2012, a requirement for new entrants to undertake one year of full-time supervised, client-facing work before being qualified as a financial planner;
- A national assessment system, out of the hands of the trainers;
- A commonly recognised financial planning curriculum by 2012; and
- By 2011, mandatory continuing professional development training in ethics.
The FPA’s recommendations also look to solidify the position of professional designations.
In its paper the FPA was critical of some of the flow-on effects of Financial Services Reform (FSR), saying FSR had established robust regulatory foundations for financial advice in a number of areas, but had hampered development in others.
The paper pointed to the way in which many education providers and Australian financial services licensees had failed to exceed the minimum standards, with the dominant range of courses designed only to meet FSR and RG 146 requirements.
The current system “devalues the identity of those who should be genuinely able to identify themselves as financial planners”, the paper states. The FPA said it is “no longer sufficient to simply complete government mandated education and training requirements”.
In regard to assessment of the competencies of financial planners, the FPA said it wants to work with the Government and the Australian Securities and Investments Commission to develop a national assessment examination, preferably independently run and disconnected from the education providers.
The association may consider tertiary education minimum levels part of FPA membership, and as such is seeking feedback on whether there is a need to require existing financial planers to undertake further study where necessary.
The FPA said it must be “cognisant of financial planners who have been tested through FSR, or through robust professional designation programs”.
The FPA has called for submissions on its consultation paper, closing date 31 March 2010.