Reforms could cause structural shift in education
The current wave of regulatory reforms in financial services and focus on professionalism could lead to a structural shift in financial services education, with a focus on university qualification.
Financial Planning Association deputy chief Deen Sanders (pictured) said the most likely near-term impact would result from CP 153 consultation, which had the potential to change the shape of the industry.
It could lead to a proliferation of exam-style preparation rather than competency-based skills assessment, and a higher demonstration of technical knowledge among new advisers, although there remained a question over what impact this could have on overall competency.
This was supported by financial services education provider Kaplan, which is currently developing new qualifications for advisers and planners in line with the new Financial Services Training Package, and moving into a supported online delivery model, according to vice president Marilyn Hill.
“CP153 has the potential to completely change the way Kaplan delivers its adviser training,” she said.
“We may find ourselves moving towards a training model that is more focused on preparing candidates for the regulator’s certification assessments and periodic reassessments.”
Feedback from clients also suggests that a fee-for-service environment is encouraging advisers in some financial planning firms to undertake extra qualifications in order to provide additional services to clients, such as full service self-managed superannuation fund advice and mortgage broking, she said.
Sanders also said reforms such as opt-in could lead to a short-term dampening on supply of new advisers if licensees are cautious about recruitment strategies and the education levels of new entrants until it becomes clear what is required.
However if Future of Financial Advice (FOFA) reforms led to improved consumer confidence in financial advice, it would lead to a greater community requirement for advice, and in turn supply, he said.
Griffith University associate professor (finance), Dr Mark Brimble, said the reforms would impact more on financial education institutions that focus on programs that just meet regulatory requirements rather than universities.
Soon more education will be required, leading people towards more comprehensive programs as the acceptable norm, he said.
Brimble anticipated the momentum towards higher education standards would drive greater participation in tertiary education as the primary pathway for new industry entrants.
In the past students had elected to leave financial planning pathways due to perceptions over a lack of ethics within the industry, but demand will increase as the legal positioning improves, he said.
There had been increasing interest from the industry in the university’s students, and the repositioning of educational pathways at the tertiary level had driven more interest in access to students or partnerships around study and training, he said.
The industry was also facing a shift to a national curriculum that would be broadly accepted as the key components of a financial planning program, and hopefully that would be done in consultation with the industry rather than being enforced by the regulators, he said.
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