"Qualified Adviser" Education Options

(For those waiting for the next "Blog" post about how I ended up here - it's coming - but I was thinking about this)

There's been a lot of discussion about what the "Qualified Adviser" education requirements should be this week. And I had some thoughts, so I decided to put them down here.

Firstly, let's acknowledge - the name will change - but I will use it here because that's what we have. Feel free to vent, but it will change, so it's probably not worth worrying about.

So, here's what I've been thinking about:

1. It's impossible, and premature in my view, to consider the education of a "qualified adviser" until we know the scope of the advice they can and can't provide.
2. Whatever the scope of the advice they provide, there has to be an acknowledgment that the licensee - be it a super fund, a life insurer, a bank or any other product provider - is actually providing the advice (this is technically still true for employee reps - although the combination of FAR and individual registration, the change in licensee landscape, and look through from a Code of Ethics/FSCP perspective, has clearly decreased the prevalence of employee reps).
3. It would be a shame and a missed opportunity not to provide a pathway from a "Qualified adviser" to, over time, become a financial planner.

So, let's break that down.

"Scope" or How much advice?

Until we know what advice a "qualified adviser" can provide, it is impossible to know what their education requirements should be. Someone who currently provides general or wholesale advice only needs to meet RG146 for the specific knowledge areas in which they provide "advice" (is it advice?? Let us say yes....hmmm....yes).

Side Note -?RG146 was pretty robust back in the day. ASIC did an excellent job assessing courses, their content and learning outcomes against the RG146 framework, and you will often hear financial planners who went through this back in the 2000s tell you how good and hard the courses they needed to complete were. ASIC stopped doing this, and the cowboys's swept in (you know who you are!) - and long story short - FOFA, FASEA, LIF, RC, QAR, Exams, etc.?

The point is that once we know what advice can be provided, we can assess how much knowledge (through education) a "Qualified Adviser" should complete to ensure they have the right level of education.

"Qualified advisers" should all understand the financial services industry! The types of products consumers can purchase. The financial advice laws (and boundaries). The disclosure obligations. Consumer protections. To enough of a level to understand what consumers are saying to them and where the boundaries are.

"Qualified advisers" should also all understand ethics and professionalism - so that when they find a client/member/consumer whose advice needs sit outside their boundaries or guardrails - they can decline to provide advice and refer them to a financial planner who can help them - rather than just pushing through (given the unfortunate evidence that this does currently happen at times).

What does this all mean??Saying right now that the education level of a "Qualified adviser" should be "RG146", "Advanced Diploma", "Bachelor's Degree (Minor/Major/Specific)", "Graduate Certificate", AQF5/6/7/8, etc., is putting the cart before the horse! Let's be honest; they probably don't need a whole cart to be a "Qualified adviser". Just the Retirement bit. Or just the Life Insurance bit. Or an Investment bit.?

Which Financial Products

The other reason "RG146", "Advanced Diploma", "Bachelor Degree (Minor/Major/Specific)", "Graduate Certificate", or AQF5/6/7/8, etc., is putting the cart before the horse is that the specific knowledge areas a "Qualified adviser" should complete shouldn't be one sized fits all - it defeats the purpose.

The specific knowledge area education a "Qualified adviser" providing advice to someone in their 20s-50s about growing their super (super, investments, insurance)?should be different?to someone providing advice on retirement (retirement products, social security),?which should be different?to someone providing advice on life insurance (life insurance)?which should be different?to someone providing advice on investment products (investments and tax) [yes - I know I missed some - but you get the point!]. They don't need to know about the entire financial service system in the same level of detail as the professional financial planner. Otherwise, they may as well be financial planners! (And again - let's be honest - this was most of the frustration with FASEA)

Whatever the education framework is - it should be far more flexible than the one-size-fits-all approach "most" RG146 courses, or FASEA courses, took. One size fits all doesn't solve the issue of getting more "Qualified advisers" in front of more Australians.

Pathway to Financial Planning

My last point is that it would be a shame to bring more people into financial advice provision - even in a limited way - if we then limited their progression to becoming a full financial planner. So, whatever level of education they complete should be part of the progression to being a full financial planner. Protectionism, antagonism, class warfare, etc., won't solve the issue. We have significantly fewer planners in Australia than we need or than consumers want to engage with. "Qualified adviser" should be a stop on the journey or part of the pathway - not seen as the end of the trip because switching from there is too difficult.

Other professions have messed this up. How many BAS agents become Tax agents? How many conveyancers become lawyers? How many nurses/pharmacists/etc. become doctors? Drafting technicians become architects. I could go on.

The point is that we can't afford to make this mistake in Financial Advice.

Conclusion

If you've hung around this far - well done!

So, what is the answer? Well - if I listen to myself - it's too early to figure that out. But - if I don't - the following makes sense to me:

1. A unit at AQF 7+ of financial services law covering products and the financial services environment.
2. A unit at AQF7+ of financial advice law covering disclosure, protections, etc.
3. A unit at AQF7+ of ethics and professionalism. Let's start "Qualified advisers" off on the right foot and have them able to think and personally challenge if they should be providing the particular piece of advice.
4. A (or multiple) unit/s at AQF7+ that cover the specific areas they advise on (be it super, retirement, life insurance, investments, etc.)

It should (MUST!) also be flexible so they can do it with whichever provider they want, in whichever order they want, and as quickly or as slowly as they need to. And it should be fine if they do the full FASEA qualifications with some other institution or multiple institutions - as long as we get more consumers getting more professional financial advice in the end.

Let's see where we get to!

What do you think?

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