A profession divided over ‘experienced pathway’
The Government’s exposure draft legislation delivering the “experienced pathway” has revealed a deep divide within the financial planning profession with even some of those who will be advantaged by the proposed regime admitting it risks undermining professionalism.
However, there is almost unanimous agreement that one of the biggest failings of the Financial Adviser Standards and Ethics Authority (FASEA) regime will be addressed via a more flexible degree approval process including the exercise of ministerial discretion.
At the same time, new analysis undertaken by WealthData suggests that if the Government’s legislative draft passes the Parliament relatively unamended those using the pathway will likely continue operating as advisers for at least a decade and perhaps up to 20 years.
As well, WealthData principal, Colin Williams said that the changed dates revealed in the exposure date of 1 January 2007 to 31 December, 2021, could add as many as 400 advisers to the number of beneficiaries of the proposed arrangement. Earlier, WealthData analysis had pointed to more than 3,000 advisers being potential beneficiaries.
The reaction of advisers who have pursued their degree qualifications irrespective of the promise of the “experienced pathway” was reminiscent of the negativity directed towards those perceived to have benefited from the Financial Planning Association’s ‘grandfathering” of the Certified Financial Planner (CFP) designation. In other words, it will not dissipate quickly.
The following represent a cross-section of adviser reactions to the exposure draft:
“As someone who has passed the exam and spent the money and energy to complete the required additional courses, including the ethics requirement, this is insulting. It does not matter how many years of experience you have every financial advisor should be doing the ethics module at least. I do not see why I had to go through so much money, stress & energy and sacrifice my free time when others don’t.”
“Please let me know who I am to send my exorbitant course fees to since I was (incorrectly) instructed by government that I HAD to do these courses to stay in the industry despite being 63 at the time I needed to be (re-)qualified…”
“This is shameful as an industry that we lobbied to have this watered down so much. Everyone should have just got on with it and moved our industry towards a profession. No one who supports this should be allowed to call themselves a professional.”
“agree 100% – what a disgrace. I too studied Grad Dip after 30 years of experience despite having many other qualifications. the experience pathway is simply bad policy and it should not happen. it’s all to appease a few who are not committed enough to study like everyone else. What a disgrace!”
“Agree, I have just applied for the very last subject – what a waste of my time and money. I am so angry that this was not put in place earlier.”
“Listen to the sound of lawyers rubbing their hands together. Watch for the class actions from advisers that are out of pocket for (now) unnecessary further education and advisers who have left the industry claiming lost earnings. This is such a bad look – watering down legislation, aiming to promote professionalism, at time when corporate greed is off the dial.”
Education levels for experienced financial advisers fall roughly into 3 groups:
The experience pathway benefits Groups 1 and 3. Meanwhile Group 2 have had their freshly acquired sensibilities offended. Little wonder the profession is divided!
Not saying you’re wrong, but this was not my experience dealing with FASEA to get my B.Com approved. In fact they asked me about all my qualifications (which initially I though was part of their assessment of my degree). So I mentioned my SMSF accreditation, Adv Dip (FS) FP, CFP, FCHFP and received their response that I only needed to complete the Professionalism and Ethics Course to be fully competent beyond 2026.
Yes, they did indeed start of saying all degrees older than ten years were a nullity (and at the SMSF conference) the first FASEA head was told to ‘you’re not qualified to be up there, get off the stage’ as several participants in the room looked up his Linked in profile to see his degree had been obtained 20 years ago. He quit a few weeks later and that 10-year story got dropped.
Anyone with a relevant degree needs to get it assessed by a third party assessor company. And then forward these to whoever needs to look at it now (think its that dept within ASIC who has taken on the FASEA role? You may just be surprised at the positive outcome.
To further compound the division over the experience pathway, FPA has complained about lack of a sunset clause and indicated they will be lobbying for one. This is the absolute height of hypocrisy from a so called “professional association”. If ever a sunset clause was needed in financial advice, it is for the appalling “grandfathered CFPs”, an arrangement which has been an albatross around the neck of professionalism for over 20 years.
Before FPA puts in their submission for a 10 year sunset clause on the experience pathway, they should implement a 20 year sunset clause for grandfathered CFPs. This would effectively see the long overdue cancellation of all grandfathered CFPs immediately. It might also bestow a modicum of much needed integrity and credibility on the FPA, and improve their dismal lobbying effectiveness.
No such thing as a “grandfathered CFP” – every CFP did the CFP course as it was required at the time.
And the requirements for the first intake were deliberately lowered to something far less than would be expected for a professional standard of education at that time. This was 25 years ago, not 100 years ago. Standards were deliberately lowered to maximise signups, and maximise FPA revenue. Only after a large number of members were signed up at lower standards and given “grandfather” status, did FPA roll out the genuine level of professional education consistent with CFP standards. Amazingly, it was only a few years later! It was all a gigantic con.
Any association that persists in defending this appalling scam cannot call itself “professional”, and will never have any credibility. It is one of the reasons FPA has been so hopeless at getting reasonable outcomes for members from its lobbying efforts. They are not respected, and not credible.
There is one eternal truth across every conceivable ‘profession’; university graduates are essentially useless until they’ve practised for a number of years, when practical hands-on real life application and experience provides the true and necessary education.
I am a little baffled on comments on here and similar forums, why a number of planners (or union/industry super fund employees purposely stirring the pot) are so vitriolic against the experience pathway.
Via the pathway, if a larger cohort of experienced planners are enabled to continue providing quality advice for the next 10 – 15 years (most of those affected by the experience pathway will likely be finished by then as they’re roughly aged 47+), then how exactly is that a bad thing (with more clients out there than can be properly serviced by us all), and how does it affect you?
False arguments abound of ‘higher standards’ or ‘public protection’ (I’ve met world-class unethical lazy lying scumbags with impressive education credentials in my time), or ‘public opinion or perception’, (aside from left-leaning media and Labor/union/industry fund aligned consumer groups, the typical client cares only about what you can do for them and how much they trust you. and what a dumb, mentally lazy hollow argument; if the public cared so much, the non-degree experienced planners in question would already be out of business from lack of clients).
For those so blind, ignorant, biased or self-servingly self-righteous about their degree… get off your high-horse, get over yourself, it really doesn’t matter. It is an ignored expensive piece of paper that only 1 client in 1,000 even takes brief note of, that signifies you’ve passed a very basic form of ‘rote memory testing’ entry into a chosen field that was appropriate for the time you entered, which really has provided sparse real-world knowledge and even scarcer client benefit.
Let’s be honest, unless you graduated within the last 2 years, since your degree almost every single piece of legislation, planning process, analytical thinking methodology, guiding association policy and practical application has either already changed or about to be altered/modified.
Formal education is really the starting line and first ten metres of a career’s marathon.
Two more conversely conjunctive eternal truths; division within any group or ‘profession’ (or industry, for those still-screaming puritans), does nothing but weaken. Contrariwise, there is strength in numbers.
Without numbers, (not papers in frames), no political party and hence no governmental department gives a flying fig about any body, organisation or group.
And no, I am not an experience pathway candidate. I’m a highly successful FP business owner, nationally recognised independently awarded planner for almost 28 years, independently wealthy but still working full time in a very profitable specialised business I love, love the solutions and specific clients we deal with, and due to my own thirst for knowledge, have done all the required ‘degrees’ with two walls full of expensive papers hanging in frames, plus generally average about 80 – 100 CE points per annum.
For all that formal training, I have learned infinitely more from my own clients and situations I have been faced with throughout my tenure. Our business has a number of younger, even more highly qualified impressive planners, who will still come to me especially on complex cases, to draw on my real-world experience and extensive knowledge garnered over all those years dealing with so many varied situations. In our team meetings, we open the floor to everyone present including admin staff in case they have important knowledge or information to impart.
Rather than being either condescending or dismissive of other planners, at professional outings, I will happily sit down with anyone, be they old, ‘unqualified’ but experienced, or young, new, and highly educated to listen to what they may say in case I can learn something new or take with me a new angle or consideration that bears further thought. To their credit, the the young ones under me also hold this same view and none of us feel falsely threatened by another planner or firm, regardless of whether they are ‘educated’ or ‘experienced’.
I agree with the proposed changes as long as it looks at both the experience and past education. I started as an insurance adviser and over the years did The LUA Diploma of Financial Planning, then did the CFP course of study and qualified =. not grandfathered. Then the FPA decides that you have to pay their exorbitant fee each year to retain that qualification. (and the fact that you actually get punished by becoming a CFP as opposed to an associate by having your annual fee doubled) Then they introduce need a degree over and above that CFP. Lawyers/accountants and most other professionals including medical don’t have the situation where their qualifications are taken away because they don’t pay a fee to an unrelated body (FPA did not set the courses, just piggybacked off them). I agree with continuing education as we all know that things change. but to expect a professional to undertake a new degree while still trying to maintain their business (even if done part-time) is just too much for any getting close to retirement. Fulltime is three years parttime is five years plus. People just starting out can take time to do this study, just as i did, but dont move the goalposts just to get rid of the older advisers. Remember that any adviser that has been around for thirty plus years has pretty well proven they are ethical, otherwise they would have been ousted by their licensee or by Asic or FPA. (the bad ones don’t last).
LUA that takes me back! Did all there study and courses. And sat on the board in this jurisdiction late 80’s early 90’s
I personally think the experience pathways are a good idea for senior advisers who have been in the industry for up to 20 years. I have commenced the Graduate Diploma and done many of the topic’s but have placed it on hold until final clarification on the terms of what needs to be completed to uphold my qualification as a financial adviser. I was insulted by some of the courses I had completed so far because basically they were saying I didn’t know what I was talking about for the past 20 years. We have to continuedly keep up our CPD each year for this reason. As a senior financial adviser who has done all the degrees and many additional studies over the past 20 years have now been told these degrees weren’t good enough to carry on as a financial adviser. We could only do what was in front of us at the time. How many solicitors, accountants and doctor have to go back to qualify for their profession after 20 years of working within their industries they have trained and worked in?
Divide and conquer. Classic wedge politics.
The reality is the 40+ hours CPE is far more valuable than wasting time on doing pointless Uni Assignments that can be generated by ChatGPT. Professionalism is serving the 1 million unserviced orphans out there, left high & dry by the flawed Hayne recommendations. Not one of my clients could care less about the document on my office wall, if they cannot be seen.
What a load of rubbish from some of you who have done some diluted TAFE ( dare I say university) course and now profess to being a professional and know it all
A piece of paper does not suddenly make you high and mighty it’s time “ in the game” experiencing the highs and more importantly the lows that makes you relevant to your clients and their needs yes study and stay up to date but that should be an ongoing thing.
If after 43 years and a clean slate as it’s supposedly called ? I am unprofessional then something is badly amiss
Stop grandstanding and get on with being a true professional in every sense of the word
I feel I still have maybe 10 years to contribute my knowledge and assist my clients! I am 66 Why would I want to spend thousands on irrelevant courses ( I predominately do risk ) not to mention another 3/5 years to obtain them I think I could probably teach these highly paid so called lectures a few things about being professional!
End of Rant
…so you degrade the achievements of advisors that have sacrificed time and money to further their education while championing those that have still done little in the way of additional studies – nice work. Has it occurred to you that many of those recently minted “know it all” graduates have also been “in the game” for decades, doggedly enduring the same “highs and lows” as you? Professionalism is a vague, subjective concept – so it might be more accurate to say that the critical difference between you and those new graduates you so easily dismiss can be boiled down to discipline, energy, and commitment.
No not everyone ! Just the ones that consistently “Bitch” about older advisers who have “drunk the milk” and should not be in a position to do eight levels of subjects they will never use. Grandstanding in favour of those who have seemingly to make them look professional
There are many out there that have achieved the level of studies required today and I congratulate them on it
Then there’s the group myself included that did studies hour after hour to achieve recognised degrees only to be told they don’t count anymore
I wonder how long before these new ones become redundant ?
I can sympathise with those who may have done the studies unnecessarily, assuming the experience pathway will be approved. It was their choice to go that way.
Personally, I feel that for anybody who has maybe 20 years+ left in the industry, doing the degree might provide some benefit (at least they have time for it to be worthwhile), however for those of us who are 50+ and who may decide to leave the industry in a relatively short period of time, the cost for this extra study (in fees and time) is of little value for knowledge they already possess.
Unlike Ken’s “grandstanding” comments, for older advisors like me (I’m 59), it’s more about accomplishment, continuous improvement, and just finishing strong. So while I generally support the experienced pathway, I would expect that those who stand to benefit from the proposal (if approved) would be grateful for the exemption. Denigrating other advisors who’ve opted to further their studies at great personal sacrifice seems not only bad-mannered but strategically self-defeating.
With all your experience and knowledge I would expect you to find the degree pretty easy to complete.
However, I completely sympathise with the cost-benefit analysis you would have thought about at this stage of your life.
You clearly don’t understand the definition of a “profession”
Totally agree. Professionalism isn’t just evidenced by credentials learnt in a classroom. Its earnt by hard work, good behaviours, & a long term track record of positive client outcomes.
In 12.5 years of providing risk advice I have never been asked about my educational qualifications. I have however been thanked by clients for my professional, but personable approach, my diligence & thoroughness, and for helping put them in a better position.
There is always more than one path available to reach a chosen destination. The blind adherence of those believing in ‘Credentialism’ as the only path to being a ‘profession’ is disappointing & counterproductive. As a previous comment notes, if you’ve survived in this profession for a number of years you have proven yourself to be ethical & capable. If you’re not, you don’t survive. Surely its a positive outcome that those with this experience, knowledge & performance can continue to assist clients & help train future advisers?
The FASEA exam was method to make old advisers who had never done any retraining sit the exam again. The amount of study was the equivalent of doing a fin diploma, but you did not need a calculator. It served it’s purpose well and weeded out many advisers who could not pass the diploma today. Now for whatever reason they want to walk it back. Seems crazy to me.
They’ve already got rid of a heap of good advisers, why shouldn’t they walk it back now?
Maybe they need to incentivise the UNI degree. If no degree you can only recommend super products. If you have a degree you can do super and insurance and shares and loans. If you have a masters you can do margin lending, SMSF etc.
So what about those advisers who have completed the Margin Lending and SMSF modules previously, (the 6 month courses) but not completed the degree?
What about the LUATC courses… Personal Insurance, Business Insurances and Disability, which I completed when I first joined the industry in the mid-’80’s? (6 months for each of them, including practical experience). I’ve been practicing Insurance before I began with full financial advice a few years later… so should I be excluded from Insurance just because I don’t have a degree?
I see value in the “incentivisation” concept, but those incentives would penalise me despite having all of the above qualifications. 😛
A millennium or so ago I was at the bottom of the senior officer slippery pole in PM & C. It was made clear to me that to proceed any further I needed a degree, preferably an economics degree. I enrolled at UC one of my subjects was politics. During tutorials I was exposed to a junior lecturer who made statements about how my Department worked, its policy development functions and its relationships with government. Those statements were totally unconnected with the way things actually worked. I protested, pointing out the real facts. But this lecturer and her bosses had decided that she must be correct, after all we, the University, are paying her.
Which brings me to the comments below. I sense that there is some reverse Groucho Marx going on here, where those in the “qualifications club”, having spent the time and energy to obtain relevant (?) qualifications, don’t want any new members, particularly those who can be deemed “unprofessional”. It used to be known as “black- balling”. As to “professionalism”, that’s a state of mind, rather than a wall full of certificates, because as said elsewhere, clients don’t care about your qualifications. You see over the years most clients have had experience with procedural medical specialists, who have all the ” tickets”, but completely lack face-to-face communication skills, which is the basis of good advice. In our profession we don’t have GPs to deliver bad news to clients following the tests conducted by the non-communicative specialist.
I’ve looked at all those eight unit diplomas. Most are very generalist, to be kind, churned out to meet a market that never developed to expectations. And there is no adequate coverage of that essential advice provided by a life risk Specialist. It’s all tokenism. Yes, life insurance is mentioned but there is no detail, for example, on the essential workings, for example, of a Statutory Number 1 Fund, or capital adequacy and solvency tests. There is no encouragement of creative thought to improve what it is we do. Yes, there will be a requirement to obtain knowledge of the Tax Act, but Life risk advisers don’t really provide tax advice, we just mention the availability of tax deduction for certain life insurance premiums, suggest they consult their accountant to assess potential impact, and inform our clients of the occasional “nasty” like a lump sum tax on TPD insurance in super. But that’s it, risk specialists are not advising their clients on how to structure investments to minimise tax liabilities or take advantages of various loopholes. If we want to do that, we know we have to become a tax adviser.
Reportedly there are only 500 risk specialist advisers left and I suspect most are well over 60.. The education pathway is a great relief to those of us who no longer have the capacity, interest or desire to obtain any further “qualifications” from an eight Unit generalist diploma, which is “unlikely”, or even “unable”, to improve our advice to our risk clients. Most of us do not want to retire now, or at least until our clients tell us to do so.
Life risk new business is down 60% from five years ago, and the insurers are struggling, but still holding on to the idea that LIF is good, for them. So-called holistic advisers have abandoned life risk advice citing compliance costs. The life insurance industry needs properly remunerated life risk Specialists to retain the profitability and longevity of this valuable part of our economy.
And here is the key question, would any of those members in the “club” be pleased to increase their income tax to cope with an expanding welfare budget in the face of vast disappearing payouts from life insurers?
Old Risky, I hear you.
I think the vast majority in the “qualifications club’ don’t care too much for the qualifications as they do about removing bad regulations, getting ASIC off our backs and no longer needing to deal with AFCA. The main objective of the ‘qualifications club’ is to achieve a better outcome for all participants through SELF-REGULATION which is the hallmark of a profession.
Self-regulation will ultimately come with significantly lower costs of running a financial planning practice, significantly lower time frames to produce advice and to service clients. This may even lead to lower costs to clients and the ability to service more clients in future per adviser.
Surely this is a good thing for our industry as it moved towards becoming a profession?
The dilemma is really how to make things fairer for those who are close to the end of their careers. You have so much still to offer in terms of looking after your trusted relationships as well as mentoring and up skilling younger advisers. How the Govt achieve this could be quite simple…but with Government, nothing ever really is…
I wonder if you might have encountered better academics and content if you had done your degree at ANU instead of
Canberra CAE“UC”?One of the biggest problems with “FASEA approved” qualifications is they are nearly all provided by second rate course factories rather than good quality universities. The high quality degrees obtained by many advisers back when education was optional, were deemed largely worthless by FASEA. One good thing about the experience exemption is that well educated advisers will no longer be forced to lower their standards and cross the threshold of a FASEA approved course factory.
Yes, LIF was supposed to be good for the Life Insurers, but it has had the reverse effect, just as advisers told them it would!!
There was a compounding effect… advisers having to do ridiculous amounts of work for lower earnings, as well as a higher clawback potential meant:
Sadly, this spiral caused by some of the most appalling legislation imaginable over the last 15 years or so will continue unless the situation changes. Personally, I can’t see that happening any time soon, but the persecution of old risk advisers (and dual practice advisers) because of a stupid requirement to qualify for work they have been doing continuously for 30-50 years is not going to help the cause!!
regardless what happens now…they’ll be a group of advisers with education standards of most professions, typically working in the industry for 20 years that did the hard yards…….and then they’ll be another group….the first group will be saying “one of those” and snickering behind there backs. It says a lot about the person that didn’t do the study and they’ll stick out. Good luck to that second group operating with that flashing light on you. “one of those guys”
Will this exclude them from having to do ethics?
As the ethics is a new concept, they should also have to do ethics units.
No, it does not preclude any adviser from having to study ethics, because ethics is a large component of the exam all advisers have to pass. Every adviser still on FAR has studied ethics as preparation for the exam. Some did so via self learning, some did so via intensive short courses, and some did so via “FASEA approved” units. Those who failed the exam had to go back and study it harder until they passed.
New entrant advisers also have to pass the exam, and it seems some of them are failing it in spite of having completed “FASEA approved” ethics units as part of their “FASEA approved” degrees. They too need to go back and study harder until they pass the exam, perhaps using better content and educators.
Ethics is not a new concept either. Many advisers have studied ethics as part of other “non approved” degrees and courses well before conflicted FASEA came along. The only new part is the specific adviser code.
Agree…
Passed an Ethics module when completing the F(CH)FP several years ago…
Sat and passed the FASEA ‘Ethics’ exam…
and finally, passed the KAPLAN “Ethics and Professionalism” component of the Masters course…
I now know the difference between what is and what isn’t ethical behaviour and what can lead to unethical or ethical behaviour or even percieved as such.
I know what the pathway to professionalism needs to look like and what staying on the road to even more regulation means…
This is predominantly an attitude that one has, but it has to be backed up by knowledge (Study) and being consistently able to meet community expectations.
What, you didn’t before! That’s a worry in and of itself. I too have studied ethics, had the highest mark for the subject that year, way back in 1999 as part of my MBA, sat everything else (FASEA) and for the practising certificate with the IPA. Maybe I’m different, but I certainly new what was ethical and what was not long before any of that.
I am amazed at the reaction of those who have completed some study and are now crying poor me I want my money back. Education is never wasted, your research ability is now improved, your report writing (file notes) and in theory your SoAs should be more coherent.
Whether that makes you better able to provide advice or deal with your clients more compassionately than those advisers relying on the experience pathway would be largely subjective.
I have absolutely no issues with the experience pathway whatsoever. When I was completing a bachelor degree my professor asked me what I did and then asked me for how long. In those days I was the superannuation and investment tech guy for the eastern states and had been for 7 years with various companies.
He said to me that 5 years doing what you do is equal to a Master’s in those subjects. He had a bachelors, masters and a PhD and it has stuck with me over 30 years.
He is probably not around today, but I know how he described his degrees. BS (BullSh#!), MBS (master of…) and PhD ‘Piled Higher and deeper’! Yep, he would have had no problems with this pathway.
ANON, I perhaps didn’t explain my point well enough.
I was detailing the multiple times and the courses in which I’ve had to complete an Ethics course (in agreement with Anon’s statement).
“Ethics is not a new concept either. Many advisers have studied ethics as part of other “non approved” degrees and courses well before conflicted FASEA came along.”
Of course, most of us have would like to believe we will always do the right thing. However, completing courses and knowing what is ethical or unethical doesnt guarantee that one’s behaviour will always be ethical going forward. This comes down to your attitude and desire to meet community expectations…