How a new class of advisers can be a ‘stepping stone’

There has been a lot of consternation about the government’s announcement of a new class of financial advisers – known, for the moment at least, as “qualified advisers” – but according to Bryan Ashenden, head of financial literacy and advocacy at BT, there is an opportunity for these limited advisers to eventually replace the growing number of advisers that have left the profession.

Speaking at the SMSF Association national conference in Brisbane last week, Mr Ashenden said that while the term “qualified adviser” rightly caused a number of issues, there is still a need to understand what level of qualifications they will need to meet.

“The person that’s working in a superannuation fund call centre that’s providing the intrafund advice, what sort of education should they have? Some of the debate at the moment is looking at should they have essentially what would have been our old, advanced diploma level education?” Mr Ashenden said.

“Do they need to have the full advanced diploma? Is it OK to have only completed subjects in those areas for which they will be allowed to provide advice?

“Clearly, I think there’s an intent to say it’s not going to be the full degree requirements that a relevant provider of financial adviser today has to complete, it will be something lower, something less than that.”

Wherever the government ends up setting the education requirements, Mr Ashenden said it is important that they are a “stepping stone” to meeting the full education requirements of a relevant provider.

“From a financial advice perspective, if we know that is what it is going to be, it is important that whatever that requirement becomes, it is actually something that can work as a stepping stone for that particular individual that if they want to progress in their career or become a fully-fledged financial adviser, a relevant provider down the track, that they get some form of credit for having done that education,” he said.

Where this could be of even more benefit for the financial advice sector, Mr Ashenden said, is that there is nothing in the government’s announcement that would prohibit an advice firm employing these “qualified advisers”.

“Most people are probably thinking about it in terms of somebody who would be the intrafund advice provider within an industry fund, as an example. But the announcement actually doesn’t qualify and say that’s what it’s about. It’s just about let’s introduce this new class of provider,” he explained.

“One of those questions might be is this someone that you can have within your office? Is that an opportunity that it will provide?

“Now again, we need to wait for final legislation to see how broad or narrow the scope of this is, but the current announcement doesn’t actually limit it one way or the other.”

If it does eventuate that other members of an adviser’s office could pick up certain tasks, Mr Ashenden said that could free up some more of the adviser’s time to actually speak with other clients on the more comprehensive advice scenarios.

“The way that this has been phrased as working is that the responsibilities actually all sit at the licensee level. So there will be questions about how this type of advice gets reviewed. What are the compliance requirements around it? All of those things will still need to be dealt to because it is still a form of personal advice,” he said.

“It will still need some form of advice documentation to go with the new advice record that they’re talking about. So, there’s still a number of other requirements that come into play. But again, there’s some potential benefits that could come out for you in terms of running a business.”