Thousands of financial planners in Australia are angry and are threatening to quit. This follows the Federal government’s plan to alter their educational qualifications to the level of a university degree or its equivalent by 2019.
More than 12,000 planners, represented by the Financial Planning Association (FPA) warned that the draft legislation mandating such a change would be unfair and unworkable, reports ABC News.
In a submission to the Federal Government, the FPA said it supports the cause of higher educational standards. But forcing new requirements by 2019 would be hard and could lead to decamping of many experienced planners from the industry. The Federal Government’s move to tighten the qualifications came in the aftermath of many major banks scandals. The Commonwealth Bank, National Australia Bank and Macquarie Private Wealth were all hit by financial planning scandals.
The federal government is hoping for a qualitative change by raising the bar on the educational standards. Many consumer groups are also supporting the changes. The draft legislation proposes new advisers entering the industry from 2017 to be have a degree, pass an exam, and spend a year honing their skills, reports The Sydney Morning Herald.
The new law also mandates existing advisers to undergo a transitional phase and complete bridging courses. They must get a bachelor degree within that period or have an approved equivalent by 2019. According to Dante De Gori, FPA’s general manager of policy and conduct, the bar needed to be raised in a sensible way. “We applaud the Government for going hard on the proposed changes, but some are simply not practical or workable especially for existing financial planners,” he told ABC radio.
Gori warned that the change would lead to a dramatic reduction in the number of financial planning professionals. “This would impact tens of thousands of clients and hundreds of small planning businesses, many of which would have to close doors and shed employees,” he cautioned. Gori called for better transition requirements in the draft law to safeguard the interests of existing financial planners.