New standards could see dissatisfied advisers

New minimum degree requirements could have unintended consequences for the industry

15-Nov-2017

By Sarah Kendell

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Introducing rigorous technical standards for the advice industry risked creating a population of advisers who were overqualified for the work they were undertaking and dissatisfied with their career paths, according to the Association of Financial Advisers (AFA) 2017 Adviser of the Year.

Addressing a media briefing hosted by Zurich in Sydney yesterday, Adviser of the Year winner Charlie Fraser said while introducing a minimum degree qualification was a good idea in theory, it could lead to decreasing job satisfaction among many entry-level advisers whose daily tasks did not mirror their study at university.

“If you look at the nursing fraternity, dissatisfaction began to occur when they made nursing a degree requirement and nurses were going through this rigorous degree – they came out [of university] almost as doctors, but the work they end up doing bears no relation to the level of expertise they have,” Fraser said.

“I see a lot of equivalence in forcing advisers to become degree qualified – on the face of it that is a great outcome, but we’ve got to make sure the employment experience utilises the expertise that people gain, because if financial planning continues as it has, particularly in the larger chains where it is more of a sales role, a degree-qualified adviser is going to become dissatisfied quickly.”

Ravi Agarwal, managing partner of AFA 2017 Practice of the Year winner Mediq Financial Services, took a different viewpoint, saying the new standards were essential in helping consumers to understand the value of financial advice and the important role an adviser played in an individual’s well-being.

“Clearly we have a very important role in this fiduciary relationship we have with our clients, but I think it’s fair to say the importance of the financial adviser has [historically] been a bit in the background, and part of the professional standards is to say actually, this is a very important role,” Agarwal said.

“It’s important in people’s lives, in families’ lives, and the person who is taking on that responsibility needs to be adequately educated. That involves an element of technical knowledge because you need to have the mental firepower to be able to handle complex situations, but it doesn’t have to be at the detriment of empathy.”

He added it was vital for the advice community to put forward ideas for the framework that the Financial Adviser Standards and Ethics Authority would be developing.

“It’s an important role that we as advisers have in crafting that education experience – I don’t think it needs to be focused on analytics. There can be a huge amount of soft skills involved so there is less of a dichotomy between what the experience is as an adviser versus the educational pathway,” he said.

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