Preparing the new faces of financial advice

While compliance and affordability may be key challenges for financial planners already in practice, it is the path to becoming qualified that is most critical for new graduates and career changers starting out their new career.

It is now two years since the PY Standard commenced on 1 January 2019, requiring all new entrants to undertake a PY before they are qualified as a financial planner to provide personal financial advice to clients.

As a profession, a majority of planners and practices have been focused on other FASEA standards and their implications. This has meant resolving how the Professional Year program works in a practical sense to allow supervision of new industry entrants across four core areas - technical competence; client care and practice; regulatory compliance and consumer protection; and professionalism and ethics - has taken a back seat.

A new entrant is required to undertake a PY of one-year full-time equivalent of 1600 hours, of which at least 100 hours is to be structured training. To date, approximately 250 new entrants have commenced their PY, with more than 80 passing the exam.

Based on enquiries the FPA receives from new graduates, their main concerns are around the education requirements, the time required to complete the PY and how to find a supervisor or placement.

For students or career changers who are looking to kick off their path onto the PY, we recommend searching for roles such as customer service officer, customer relationship manager, paraplanner or associate adviser. They can then discuss a PY plan with the licensee to formulate how this experience can be recognised towards their required hours.

The FPA strongly supports this rigorous training in furthering the trust in our profession, however, among the professional community we consistently hear that managing the Professional Year is a major hurdle for prospective financial planners as well as a potential disincentive for those considering a career in financial planning.

This is a real concern for the FPA as we recognise the importance of having a strong pipeline of new graduates to take up a career in financial planning, especially to address the affordability challenges of accessing advice.

It is important that the Professional Year is seen as a valuable development opportunity, not just a tick-box requirement. The PY should provide an opportunity to learn and acquire competencies not just on paper but in practice, helping new entrants become well-rounded financial planners skilled at delivering quality, compliant financial advice.

The FPA has developed a comprehensive Professional Year (PY) tool to help licensees, career changers and students alike to simplify and streamline the mandatory documentation processes. Among other things, it offers a tailored PY training plan, mentoring and coaching resources, and automated certificates upon completion of stages. To find out more about the Professional Year tool, contact the FPA Education Team at [email protected].

Despite the recent changes announced by government, the robust education, exam and PY requirements are remaining in place. Providing the highest quality PY training now will be the bedrock of sound financial advice in our profession for years to come.

Tips for students, new graduates and career changers considering a pathway to financial planning:

- Read up on what is required to become a financial planner on the FASEA website

- Ensure you are studying or have completed an approved degree

- Figure out your goal – do you want to become a financial planner? If so, put this on the table in an interview and be clear about your intention to complete a PY

- Depending on your experience, expect to work in client admin roles in a practice for a few years before they progress you into a PY – supervision is a significant time and financial investment

- Request from your employer to begin Quarters 1 and 2 while in the final stages of your degree

- Remember that your PY may stretch beyond 12 months if you take it part-time or have to wait between stages

- Partner with a professional association to support you and your supervisor through the PY.

Dante De Gori, chief executive, FPA