It’s time to address practical education

Over 100 years ago, Mark Twain wrote something that has really struck a chord with me: “Never let formal education get in the way of your learning”. I think we could all learn a lot from Mr Twain.

For some time, our once vibrant education environment has faced a crisis. All sectors of the industry have shown disenchantment, frustration and constant debate over where they view the status and success of financial services education.

This month sees the launch of the Financial Planning Association’s (FPA) enhanced education and training requirements — a more rigorous framework for FPA members to undertake professional development, which they consider will overcome the perceived limitations of RG 146.

We have other industry observers and associations, such as the Association of Financial Advisers (AFA), proactively developing a range of formal programs addressing perceived skills issues coupled with expectations of their members to reach higher educational standards than is required under Australian Securities and Investments Commission (ASIC) regulations.

Others suggest the profession should start to set its own standards of education rather than being regulated by ASIC.

It is time to step back and take a fresh look.

The current minimum entry-level standards are sufficient

We need to recognize RG 146 for what it was intended when created. The Diploma of Financial Services (Financial Planning), as run by providers like Kaplan, Pinnacle and the like is simply a legal milestone to ensure that those entering the industry have a minimum level of competencies to start work in a professional role under supervision.

Unfortunately, many have fallen into the trap of thinking that simply because someone has completed these courses, they are immediately a financial adviser able to offer advice to a client.

Of course, within these modules there are case studies and simulated examples, but it is unreasonable to expect a written course to cover every real world scenario a financial adviser is likely to be confronted with and do so in an efficient and scalable manner. Just like accountants, doctors and other professionals, the need to build on basic education is ever present while on the job.

With this in mind, I believe the battle of many in the industry to raise these entry-level standards has really run its course. Rather, what we should be focusing on is enhancing the education pathway going forward from this starting point.

ASIC stipulates that principals and licensees must have policies and procedures in place for continued training of authorised representatives.

Practical education

Licensees and product providers should embrace their responsibility and take the lead in training and educating their operators both technically and practically. Alongside the individual’s ongoing requirements via CPD points, these groups need to be providing proactive education and personal development (PD) opportunities that enable advisers to convert their academic knowledge into a series of links between what they have learnt and how it applies to a real-world decision-making situation.

Through a structured process, focusing on an individual’s skill levels and capabilities, the industry really can contribute. And outside the traditional conference and seminar square, there is another whole range of options we can think about — role playing, shadowing, pod structures, mentoring and strategy groups, to name a few.

Keep in mind, these are targeted education solutions, not just your normal tick-a-box solutions to satisfy compliance — that is why they are so effective in converting academic education and skills assessment into good quality advice for clients.

They also assist in strengthening those all-important ‘soft skills’.

We all agree that generic soft skills like relationship management, communication, personal organisation, time management, negotiation and networking are essential attributes to work in financial services. After all, even with quality academic knowledge, how can someone explain a concept or product to a client if they cannot create a basic rapport with them?

Yet, the expectation of many in our industry who call for education providers to step in and provide soft skills development in a formal learning environment is totally unrealistic.

Education should not always be formal

With the aim to equip students with minimum level competencies and ongoing core technical knowledge, I believe the education providers have been largely successful in creating and managing formal qualifications.

However, practical skills like communication cannot be taught in a classroom environment within what is essentially a technical course. Those who suggest this seem to have forgotten the basic purpose of those courses.

As an industry, we need to take it upon ourselves to teach and develop these skills in advisers. After all, people skills are not just an advantage in financial services, they are skills used throughout life and are strengthened each and every day.

This is where it also becomes clear that the onus is not always only on the licensee and education providers in the industry. Individuals need to be encouraged to think about their own personal professional needs, in and out of financial planning. Regardless of the support of their licensee, planners and other financial industry professionals should be taking it upon themselves to ensure that professional development, in all areas, is part of their daily lives, both practically and technically.

Individuals can look to mentors and colleagues as well as those people who they admire. They can consider a new area of business or specialty to pursue. Whatever they choose to aspire to, they can then determine if their personal professional development needs are catered for, and if not, proactively seek opportunities that will further their knowledge and skills.

We seem to get lost in the perception that education of any sort can only come from within an institution. Yet the collaboration and sharing by industry participants of concepts through mentoring, conferences, strategy groups and even simply the occasional debate, is for me, the real definition of grass roots education.

And that is where I think Mark Twain got it right. Education is a lifelong journey — both in and out of the classroom.

Rick Di Cristoforo is managing director of Matrix Planning Solutions.