I am sure you have read over the last 24 months not only the Royal Commission into Banking and Financial Services but also the education reform, instigated by FASEA, into the education standards of financial advisers.
The Royal Commission has grabbed the headlines for obvious reasons however quietly in the background the education reforms introduced by FASEA have been ticking along forcing advisers to return to study on mass, to fill in any gaps. At the introduction of these reforms, there were approximately 26,000 licensed financial advisers across the country who all need to shape up or ship out!
To explain, historically, financial advisers could do as little as a three-month course and be granted a limited license by a financial services licensee to provide limited advice. Now, I think we would all agree this was not good enough and kudos to the Government for making a change on this front. However please excuse my cynicism, but who would have thought low levels of education amongst financial advisers would have resulted in such poor client outcomes as we saw in the Royal Commission!?!!!
That said, things are getting better, by way of change, by 1 January 2024 every financial adviser must hold an undergraduate (or equivalent qualification) degree that is specifically relevant to the provision of financial advice. In addition, every financial adviser must complete a course in professionalism and ethics by 1 January 2024 and sit & pass a one-off financial adviser exam by 1 January 2021. The outcome I suspect will see a lot of so-called financial advisers exit the industry and seek a career change and importantly reframe the education framework for aspiring financial advisers. Both outcomes will be terrific as it will in time lead to the provision of better financial advice and hopefully less news headlines for all the wrong reasons.
Personally, I am thrilled about these changes, for two reasons, I already hold a Bachelor of Business in Financial Planning from RMIT University (so I don’t need to do further study other than the mandatory exams 😊) and secondly because I hold hope that one day the financial advice industry will become a profession and this is a great way to start!
As I am a person who prefers to just get it done, I have spent the last three months completing the professionalism and ethics course and have sat the one-off financial adviser exam (just waiting on the results!) Whilst, returning to study was foreign to me as I have spent the last 10 years being an educator, writing and preparing exams and assignments for the Financial Planning Association, I have been pleasantly surprised how much I have enjoyed the study (albeit very tiring).
To explain, what studying reminded me of, was the insatiable thirst to learn and explore and an underlying curiosity about the content that was being consumed. Curiosity is a core value that we hold at Innate Wealth and I think it is such a wonderful characteristic as it opens endless possibilities by challenging the status quo and being prepared to change. In addition, studying is so good for your brain, it sharpens your thinking and makes you better as a result.
So to conclude, the education changes to the financial advice industry are real and rapidly taking effect (some 3,000 advisers have already left the industry). With that, we as a business have embraced the changes as they are 100% for the benefit of you and have used this an opportunity to learn, explore and challenge the status quo with the hope that one day a new profession will exist and a profession that we aspire to continually be at the forefront of…..