Future of 22,000 financial advisers remains uncertain

  • DeakinCo.
  • 22 October 2015

DeakinCo., one of Australia’s largest providers of financial services training, has called on the Government to provide clarity over transitional arrangements for existing financial advisers following the announcement of new minimum education standards for the industry.

DeakinCo. CEO Simon Hann commended the decision to raise the professional, ethical and educational standards of new financial advisers by requiring them to hold a degree, but warned that uncertainty surrounded the plight of existing advisers.

'The introduction of a minimum tertiary degree qualification for all new financial advisers from 2017 is a major step forward for the industry and consumers,' Mr Hann said.

'The new minimum education standards will create a stronger sense of professionalism and help to lift the quality of advice and ethics across the industry, which is sorely needed.'

But he warned that ongoing uncertainty surrounding existing financial advisers could set the reform agenda back.

'We call on the Government to remove uncertainty and provide clarity for Australia’s 22,500 existing financial advisers and their employers,' Mr Hann said.

'Our research shows that around 75 per cent of existing financial advisers do not have a relevant university degree. Most just have the basic (Regulatory Guide) RG146 qualifications,' Mr Hann said.

'The industry must urgently address how to ensure these advisers become compliant ─ or risk them leaving industry,' Mr Hann said.

Deakin University Senior Lecturer in Financial Planning and Superannuation, Dr Adrian Raftery, said the decision to defer transitional arrangements to a yet-to-be-formed body only added to the uncertainty facing existing advisers.

'The risk is that the industry will have to sit on its hands until an independent body is formed and meets before any decisions are formally made, endorsed and enforced.'

'That’s at least another year of uncertainty and perhaps longer ─ a year that advisers could put to use by working towards the necessary qualifications,' Dr Raferty said.

Mr Hann said demand for professional development, compliance training and workplace training programs had lifted dramatically in the past year, as planner groups moved to stay ahead of the anticipated legislative changes arising from the 2014 Murray Report.

'DeakinCo. together with our parent Deakin University and the university’s new credentialing arm, DeakinDigital, have been working closely with industry to develop end-to-end training solutions specifically for these mid-career advisers facing an uncertain future.'

'Deakin’s vertically integrated model allows a "fit-for-purpose" solution to ensure advisers could continue to practice when the new minimum standards come into effect,' Mr Hann said.

'As part of Deakin University, DeakinCo. offers a qualification pathway framework from RG146 compliance through vocational training, undergraduate degree and postgraduate degree courses,' Mr Hann said.