Experience pathway prompts fears of education drop-outs
Education providers have expressed concerns that the experience pathway will encourage students to dump their studies and has left past students angry about the inequality.
A consultation on the experience pathway was announced by Minister for Financial Services Stephen Jones last month.
The draft legislation would deem an adviser to have met the education requirements if they:
- Had 10 years of (cumulative) experience providing advice between 1 January 2007 and 31 December 2021; and
- Had not recorded any disciplinary action on the Financial Advisers Register before 31 December 2021.
While it was welcomed by most, there were concerns that it could encourage people to opt out of future studies.
Speaking to Money Management, Brian Knight, Kaplan’s chief executive, said: “There is a lot of anger there from people who have studied; these are people who hadn’t studied in a long time and had worked hard for the qualification and were proud. Now they feel they have spent all this time and money and have wasted that.
“We will have an industry divide between those who have studied and those who haven’t.”
He noted that many of the 3,000 advisers who had commenced prior to 2011 and who had been noted as lacking a degree may have begun a course but not yet graduated. These people may now look to drop out in favour of the pathway, he said.
“Some people are already studying, but how many of them will stop studying now [that] the experience pathway is available?”
Dr Michelle Cull, senior lecturer in accountancy and financial planning and associate dean in the School of Business at Western Sydney University (WSU), echoed Knight’s fears.
Both said they had seen advisers initially keen to study for the qualification, but by the time of the experience pathway announcement last year, many were unsure whether to start studying or not while they waited for further details.
Now that the proposals had been announced, there was an element of “why bother”, they said.
Cull said: “Of course, we are worried that people will drop out of their studies, but I hope those who have started will see the value in their studies and want to continue to a higher level.”
She was also angry that the experience pathway neglected the time and efforts of universities to set up these courses.
“All the work that universities have put in to design the courses to meet the requirements, it has taken hundreds of hours to meet short deadlines from FASEA to have our courses approved.
“[The government] has introduced it to honour an election commitment but is that a good enough reason? There are other ways that can recognise experience in a better way. We already assess advisers based on their prior experience and whether they need to study all the subjects.
“It makes things very difficult for advisers and for consumers too; how can we give that surety to them about the qualifications anymore?”
Knight said a way of recognising those advisers who had completed the additional qualifications was also needed to differentiate them from those who had used the experience pathway.
“The exemption is smart, and it is needed because we have a shortage of advisers, but it shouldn’t equate with a degree. How can we reward those who have done the study?”
One positive element, Cull noted, was the change in technical limitations for advisers who had been unable to meet the qualification standard for technical reasons, such as a change in course code.
“If an adviser has done an approved degree and then the code changes or they change university, sometimes that meant they weren’t approved. This was a real problem for people especially new entrants so this is an excellent decision by the government.”
The deadline for submissions for the experience pathway consultation is 3 May.
AUTHOR
Laura Dew
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What is discussion fails to highlight is that many of the advisers with 10 years experience have degrees now but these are not considered appropriate degrees in the eyes of the legislation but actually useful for the work they are doing . like myself with a BBUS accountancy from sandstone university , good for stockbroking and reading balance sheets and the like/ A PLUS 20 to 40 hours CPD for the last decade plus industry association and meetings plus real life experience
Exactly. The experience pathway is not for advisers with no education. It is for advisers whose education doesn't meet the dodgy "FASEA approved" criteria.
True but individuals with relevant degrees are/were only required to do an ethics course plus a couple of subjects. Having the same Graduate qualifications as yourself, plus a DFP plus Grad Dip in Applied finance I completed the required minimum and it was pretty easy to go one step further & obtain a Masters Degree in FP. Unfortunately, it seems the majority only have DFP 1-4 and are ruining for you and me.
I can understand the frustrations, particularly from advisers who've spent so much time and money obtaining the qualifications that were waved as a giant stick over their heads, with the threat of having to give up their career and business if they didn't do it.
But I can't sympathise too much with education providers. Most of them didn't bother to create the current AQF level courses for financial advice before they were mandated by government. New advisers will continue to need their services in order to enter the industry. Advisers wanting to further their knowledge and those with under 10 years experience can still do the courses.
For advisers with over a decade of experience, the qualifications hold less value - of the units I've completed so far I've found very little value. I feel like I'm paying thousands of dollars and taking many hours from my clients, business, staff and family to tick a box for the sake of ticking a box.
This brings me to my other point: in addition to the obvious costs to advisers of time and money, many of these financial advisers are self employed. The reality is managing and growing a business that supports the incomes of staff becomes far more difficult when study is added. Education providers can be upset about losing a source of revenue from the backlog of advisers needing to meet education requirements, that's fine, but what about the families and (typically) small businesses having to foot the bill? I'd argue that they have been impacted significantly more when compared with education providers.
Can we please dispense with this garbage about "advisers who haven't studied" and "advisers who don't have degrees".
ALL advisers who qualify for the experience pathway have studied. Apart from anything else they have at least 10 years of CPD. Even if they aren't members of associations they will have done compulsory CPD under their licensee's obligations for further training. They will also have studied to pass the FASEA exam. It doesn't matter if that study was via "FASEA approved" courses or not. In many cases it will actually have been via a superior method. Those advisers who have not done sufficient study to pass the FASEA exam are not eligible for the experience pathway, because they are no longer advisers.
And many advisers who will use the experience pathway DO have degrees. They just don't have the narrow range of "FASEA approved" degrees.
Those course providers who chose to make easy money from FASEA's conflicted and incompetent standards regime have been gifted revenue on a platter. It is ridiculous for them to be complaining their gift will be slightly smaller now. It's also interesting to note that most of the quality universities never went down the "FASEA approved" road in the first place, perhaps seeing shonky FASEA for what it really was, and choosing to retain their reputations rather than making a quick buck.
I would have cheered that comment 6 years ago when the legislation was first introduced and I myself had 20 years of CPD plus multiple degrees. Today, given how easy it was for those with relevant degrees to meet FASEA requirements I won't. What we're left with today, is the dregs of the Advice world that are selfish individuals that don't care about their peers. I know advisers that have only completed a DFP1-4 and failed the investment subject and given up. They're terrible Advisers, but can sell ice to Eskimos, and are left over from an era of Sales. Having a majority of highly educated advisers was an opportunity to be considered as professionals and receive the benefits of that being less Government intervention.
Agreed
Shame cause it was a real opportunity to lift standards. The Gold standard was a Masters Degree. However, now just completing a Grad Dip in FP puts you ahead of 10-year candidates, so I can see a lot of people pulling out and now not doing a Graduate Dip, just finishing with a Grad Certificate, and doing the minimum. Certainly not proceeding to Masters level.
Nope. The "Gold standard" is the real (not grandfathered) CFP. The CFP Certification subject in particular requires passing an exam many times harder then the FASEA exam or anything in a "FASEA Approved" course.
But the biased, conflicted, incompetent, corrupt FASEA said the CFP course was worthless. There are plenty of advisers who do meet the gold standard of financial advice education, but will be qualifying via the experience pathway.
The CFP brand in Australia is a symbol of people with little to no education that are dependent on a couple of initials. Your beloved FPAAA is hardly a body that professional would want to be associated with.
Speaking of cutting the "crap" The article reads more like a "whinge" from the Universities and others about how much revenue they are missing out on. Since when where they all concerned that advisers would not continue to educate themselves. Why do so many think that people wont take up the challenge and learn new things. I had to over 40 years. And if people want to stay in the industry they will need to. Its not a set and forget strategy. Learn { at your own pace} BUT LEARN or you will get left behind.
Next year I will mark thirty years in this industry. I worked my butt off from the very first days, earned my CFP the hard way back in 2001, and now I have to go back and be reprogrammed because someone has arbitrarily decided my qualifications are "too old". I have kept up with all training requirements, met all industry standards and have successfully run my own practice for over seventeen years now. Nobody can tell me why my CFP is less valid than someone who earned it three years ago, when I did all the semesters, all the study and all the exams to qualify. The FPA have thought enough of it to send me certificates, notifications and bills for the past 20-odd years, and they kept telling me it was the highest qualification I could have. Thanks however to all the 'professionals' who think I am not worthy of any sort of exemption, and need to take over 700 hours away from my clients to keep a license that I earned nearly three decades ago.