The Government’s education proposal to allow financial planners with 10 years of experience to continue practicing without higher education is a backwards step, the Financial Planning Association of Australia (FPA) believes.
Speaking to Money Management, FPA head of policy, strategy, and innovation, Ben Marshan, said the association had a long-held position that there was a need to raise education standards and the proposal was effectively a backways step.
“In saying that it's always been our view, and we advocated to the Financial Adviser Standards and Ethics Authority [FASEA], that experience is an important component of demonstrating competence to provide professional financial advice and FASEA didn't do enough to take that into account,” he said.
“So, how do you balance taking experience into account and having a high education standard? That's what we're working through with members at the moment.”
Marshan said 60% of FPA members were opposed to any form of exemption for experience and 85% of members thought experience could be taken into account but not a full exemption.
“We're still getting feedback from members, we're still talking to other associations, and we're still talking to academics and trying to understand the issues that are going on,” he said.
“We are supportive of a higher education degree, the kind of comes out of framework, but providing a lot more credit for experience along the way.
“FASEA definitely did not take experience into account in a fair way. They didn't do it in a way that that allowed an experienced financial planner to demonstrate that they were competent to meet the education requirements.”
Marshan noted there was now an opportunity with Treasury looking at the issue and that he did not necessarily believe Treasury would put the proposal out if it was not their intent to implement it.
“I've had a lot of conversations with a lot of associations and I think we're all universally in agreement that while FASEA didn't get 100%, right, they weren't necessarily far off. So, throwing the baby out with the bathwater is not necessarily the right outcome either,” he said.
“If all of the associations are in agreement that this proposal is not the right one for the profession, then Treasury might turn around and says ‘well, we propose it’, then the profession says ‘no’. So, Treasury will need to come up with something else.
“I think that's where there's an opportunity to get the right kind of outcomes. I don't know which way it will go. Some days I think it's window dressing and other days, I think, well, there's an option to actually get the right outcome for the profession here as well.”