JAWG proposal aims to ‘broaden the pool’ of advisers without dropping standards

Last month, the Joint Associations Working Group (JAWG) put forward “core principles” to improve the pathways for new advisers to enter the profession.

In what the group said was a unified response from the financial advice sector “in response to declining numbers of financial advisers”, JAWG proposed some core principles to strengthen the education standard for new entrants to the financial advice profession.

The coalition of the Financial Advice Association Australia (FAAA), the SMSF Association, the Stockbrokers and Investment Advisers Association (SIAA), and other professional bodies and associations, said the principles aim to enhance the flexibility of the education standard for new entrants while maintaining professional standards.

Speaking about the proposal at the SIAA conference last week, FAAA chief executive Sarah Abood explained that it is important that the “standard doesn’t fall”.

“Anything that we were doing to broaden the pool of candidates is not lowering the standard, it’s expanding it and making it more flexible,” Abood said.

“It is really important to us that the qualification requirements remain at AQF7, it remains important to have a university degree and these proposals absolutely do support that.”

SMSF Association chief executive Peter Burgess agreed, noting that from his perspective, maintaining a high standard was a “non-negotiable”.

“As an association, we stand for raising competency standards so it was an absolute non-negotiable that whatever we did here was not about lowering the bar at all into the profession,” Burgess said.

“It was very much about flexibility and recognising that a lot of these individuals, a lot of these professionals, career changers and the like, have studied some of these knowledge areas and other degrees and they should receive some credits towards the financial planning degree.”

Abood added that while the qualification framework as it stands works well for many participants, more can be done.

“Certainly, a number of our members are very happy with it and we want to ensure that the current degrees that are available, the current providers and so on continue to offer those courses, which do suit many participants, although … not necessarily all,” she said.

“I think an important element of the proposal is that we’re recognising that there are absolutely areas that are core and irrespective of whether you want to be a stockbroker, whether you want to be a comprehensive financial adviser, whether you want to be a life insurance specialists, whatever it might be, there is core knowledge that applies irrespective of the stream of advice that you choose to practice in later.”

Under the JAWG proposal, a further three elective knowledge areas to be chosen from a broad list that recognises different streams of financial advice would be added to the five-core knowledge. Examples of elective knowledge areas could include SMSF advice, portfolio management, and aged care.

Another element of the proposal, said Judith Fox, CEO of the SIAA, is trying to expand the number of education institutions that are providing courses for financial advice.

“Our proposal is really about trying to bring more education institutions into the mix. That’s good because it means a broader pool of students,” Fox said.

“It means more students get to hear about advice as a potential career and that advice as a career can be in different streams of advice. It might be comprehensive advice, it might be investment advice, it might be giving advice to an SMSF, but we really do want there to be more access to more universities and our proposal allows for that.”