Starting a career in Financial Planning: Education remains cornerstone to professionalism

Higher standards is the mantra but have planners dragged the chain on lifting them? 

Given recent mainstream media coverage of financial planning and some of the larger players, it would be easy to assume that education in the sector is minimal and planners are skating through courses with very little academic content. 

However long term financial planners will know that education and training has been part of the sector for many years reaching back to those courses that preceded the development of the first units of the Diploma of Financial Planning (DFP). 

The requirements for education have increased throughout the years, picking up standards set by the profession, leading to the development by the Australian Securities and Investments Commission’s (ASIC’s) Regulatory Guide (RG) 146, which defines the minimum standards required to provide financial planning advice. 

At present RG146 requires planners to have completed coursework at the diploma level and undertake annual continuous education requirements to meet licensing requirements. 

This benchmark has been under discussion by ASIC for some time with three consultation papers released advocating the development of a new training register, the introduction of a national exam and university degree equivalent training as the minimum benchmark for new advisers from 2019. 

Despite ASIC stating in July of last year that a revised RG146 would be released in April this year setting out the new education pathway the planning sector has yet to see this guide. Recent events such as the Senate Review into the performance of ASIC have probably played a part in its delay. 

At the same time the financial planning sector - whether it be at the association, licensee or practice level - has already recognised the current standard is too low and has put in place requirements for planners to adhere to higher standards. 

In 2011 the Financial Planning Association stated that from mid-2013 new practitioner members would need to hold a degree qualification - which was also required to gain the Certified Financial Planning (CFP) designation. 

In recent months the FPA has found company in its desire to lift standards with planners at AMP, Commonwealth Bank of Australia (CBA) and NAB-owned licenses required to hold degrees, attain the CFP or similar level designations and be a member of an industry association. Timeframes and details differ but the big numbers are the planners involved in this move to higher standards - about  6400 planners across 15 licensees, or about a third of the total financial planner profession. 

While this is a positive development there are still some issues that have yet to be decided with ASIC considering the introduction of a national exam before an adviser can practice as well as the need to set up an adviser register to track adviser education. 

The first of these is still an area of contention but the second has been greeted with enthusiasm by industry associations and licensees keen to ensure the work they have done in lifting standards among their own planners is recorded and made public for the benefit of consumers and the profession.