Advisers need more support in education transition: Elders

Speaking to ifa, the licensee’s general manager Tony Beaven said he is concerned about the amount of advisers in the industry who only hold the minimum qualification, as meeting the new degree standard will be a “massive step”.

“The new standard is going to be AQF level 7 to 8. A financial planning diploma (DFP) is nowhere near that,” Mr Beaven said.

“There is a vast majority of financial advisers who only have a DFP. A lot of universities won’t accept you for a graduate diploma unless you’ve got a minimum education level.

“Advisers need to be looking at an advanced diploma, which will take them to AQF level 6, and then tertiary qualifications after that.”

Mr Beaven said the clock has already started ticking for those who need to study on a part-time basis, making it important for dealer groups to begin offering support.

“If we don’t do something to support advisers now, then in a few years’ time when this benchmark kicks in, we can be losing 20 per cent of our advisers in the industry,” he said.

“That’s quite frightening. We have to act now.”

Mr Beaven’s comments come after FPA head of policy and government relations, Ben Marshan, told ifa there is still a lot of uncertainty around what will be required of existing advisers.

He said until the standards-setting body is set up, anyone beginning the transition would be “starting in the dark”.

The education bill was introduced into Parliament in November 2016. The proposed law includes compulsory education requirements for both new and existing financial advisers, supervision requirements for new advisers as well as a code of ethics for the industry.

The bill will also mandate an exam that will represent a common benchmark across the industry and an ongoing professional development component, the statement said.

The new professional standards regime will start on 1 January 2019, whereby new advisers entering the industry will be required to hold a relevant degree.

Existing financial advisers will have access to transitional arrangements allowing them two years, until 1 January 2021, to pass the exam, and five years, until 1 January 2024, to meet the education requirements.