FPA digs in against ‘experience pathway’
The Financial Planning Association (FPA) has now formally declared to the Government that it does not support the proposed 10 years of experience in the past 12 years pathway proposed, nor an “any relevant degree goes” outcome.
Instead, the FPA wants the Government to make the education standards part of the quality of advice review and, failing that, to make any ‘experience pathway’ based on 15 years’ experience in the last 20 years “to broadly align with when the legacy education standards ushered in under FSR commenced in 2001 and cater for those with non-standard work patterns”.
Further the FPA is arguing that, “It should be limited to practitioners who are over the age of 55 and are more likely to exit the profession over the next decade, but have significant experience, positive client engagement and competence to provide advice. And it should have a 10-year sunset period after which they should exit advice provision if they have not undertaken the experience competency assessments.”
In a submission filed in response to the Government’s ‘experience pathways’ proposal, the FPA said it believed that such an approach provided an insufficient foundation to meet the objectives of raising the minimum education requirements for professional financial advice providers and continuing to build consumer confidence in the profession.
Referring to a survey of its members on the issue, it said its membership supported an education framework which included more recognition of prior learning and experience – something which it believed the Financial Adviser Standards and Ethics Authority (FASEA) had failed to take sufficiently into consideration.
The FPA proposes four pathways (assuming an experience pathway is adopted by Government). Under all four pathways, there is an assumption that the Exam has already been completed, registration with the FSCP will occur no later than 1 January 2023, and there will be no amendment of the current education time frame (except under the experience pathway sunset recommended by the FPA above).
The proposed pathways are therefore as follows:
- No degree
- For financial planners who have not completed a university degree at AQF 7 (Bachelor’s
degree); AQF 8 (Graduate Diploma or Masters); or AQF 9 (Doctoral Thesis). 2. Any degree
- For financial planners who have completed a university degree at AQF 7 or higher which is not an approved (current) or specific (future degrees not included on an approved list) financial planning degree.
- Financial Planning Degree
- For financial planners who have completed a university degree at AQF 7 or higher which
is an approved (current) or specific competence (future degrees not included on an
approved list if it is not maintained by Treasury) financial planning degrees.
- This pathway can be used for new entrants noting the opposite completion order and
additional professional year obligations (i.e. education; professional year; exam;
- Experience Pathway
- For those born before 1/1/1967 (i.e. 55 and over) who have 15 years of experience over the past 20 years.
- The FPA recommends this pathway should sunset in 10 years after which the financial planner ceases to be authorised or has completed the education requirements via the core competence and individual authorisation competence frameworks below.
- For the core areas, a competency framework covering 4 areas can be developed which covers:
- an Ethics Unit (compulsory) [same as the current one, so if you’ve done it, nothing further
- a legal and regulatory unit
- a tax and commercial law unit
- a financial strategies, products and markets unit
For any of these units: experience and CPD can be used to demonstrate competence; or if the unit has been completed at AQF7+ as part of prior degrees, certifications or individual units of study (through universities, RTOs or approve professional associations); or the unit of education can be completed (through universities, RTOs or approve professional associations). To create an easy to understand education option, they can be built into bachelor’s degrees (they already are in financial planning specific degrees) or can be built into a Graduate Certificate for career changers or can be undertaken as individual units for experienced planners who are in this transition phase.
Competence can be assessed by universities, RTOs, or approved professional associations using a variety of methods such as challenge pathways (which are already used by universities under the existing framework), knowledge assessments, interviews, portfolios of work, exams, assignments etc., ensuring the assessment is anchored on the core competencies required of the unit of study.