In light of some dealer groups making a move towards improving their own professional standards, there have been more calls for higher education standards for financial planners to improve perceptions of the industry.
The executive director of boutique investment management firm Wealth Within, Dale Gillham, said a lack of financial planners with tertiary qualifications did the most damage to the industry.
“At the end of the day, it’s about the mums and dads’ perceptions of financial planners. Recent research found clients see their accountants as more trustworthy than their financial planners and this is because accountants have their university degrees,” Gillham said.
BT Financial Group has recently made some changes to its recruitment strategy, phasing out entry-level positions as it believes “that the current entry-level requirements, ongoing training requirements and ongoing certification requirements are not sufficient”.
According to the new strategy, all newly recruited planners for the group’s bank aligned channels are required to have at least three to five years professional experience and a relevant university degree or an Advanced Diploma of Financial Services, in addition to RG146 compliance.
However, the general manager of the Colonial First State advice business, Paul Barrett, said while professional standards in the financial services industry need to be increased, sudden changes in terms of recruitment requirements would not be plausible.
“The number of graduates finishing universities at the moment with financial planning degrees is small compared to those graduating with accounting or legal degrees,” Barrett said.
“What we need to do is get there in good time and work with universities to ensure they’ve got an attractive proposition for students, so that ultimately we do improve the supply of graduates into our field,” he said.
According to Barrett, the Financial Planning Association (FPA) has put forward a “sensible solution” for raising professional standards.
The association released a white paper late last year, Education expectations for professional financial planners, which recommended that by 2015 all new entrants who wanted to become financial planners have, as a minimum, a tertiary qualification in financial planning.
“It’s a good way to improve qualification levels and at the same time not restrict supply into our industry — it’s a sensible middle ground,” Barrett said.
AMP director of financial planning Steve Helmich said consumers who have a relationship with a financial planner generally perceive their adviser as professional.
“The trick is to lift the whole image of the profession with transparency around fees and build the confidence of people to use planners — that’s the objective and that’s the opportunity we need to take,” Helmich said.
