‘Professional year’ could help ethics issue
Having a tertiary degree does not make financial advisers more ethical and a professional year could help solve this problem, advisers believe.
Certainty's founder, Jim Stackpool proposed a hands-on experience, similar to an accountant's professional year, as an alternative to the Treasurer's proposal for mandatory tertiary compliance degree for advisers.
Stackpool said in his blog this professional year could tackle the rapid changes in the industry — particularly the fast growing technology solutions transforming the industry.
Responding to the blog, Paxton Bridge Financial adviser, David Murdoch said a lot of graduates were technically very good but struggled at first with their commercial sense.
"Saying you've got another degree doesn't make you a better adviser, and it won't make you more ethical," Murdoch said.
"That's where I think any accreditation should be far more practical. A curriculum could include disciplines such as ethics, project, client and strategic management."
Agreeing, Emerge Financial's director, Colin Benvenuto said a professional year could really dig deep into solving the issue of professionalism and ethics.
While The Wealth Designer's principal wealth adviser, Travis Martin, said he would struggle to hire someone who was not degree qualified, a degree would not solve the ethics problem.
"We also need to look at the way the industry is structured, which is around products. We need to realign client outcomes in terms of compliance. Not products. All this, including degrees and ethics, will contribute towards professionalising our industry," Martin said.
However, Bravium's managing director, Scott Farmer said "at the end of the day, the client engagement process is more important. It's the focus on getting results and being able to represent value that's important".
"That's not a training or a compliance issue, it's really a cultural issue in our industry."
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
