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Adviser degrees won’t be a must: AFA

By: Jeff Mazzini| Tags:


AFA chief executive Brad Fox.

12 Feb 2016

By Kristen Crawford

The Association of Financial Advisers (AFA) believes the future professional standards for advice will not force practitioners back to university to stay in the industry.

In an interview with financialobserver, AFA chief executive Brad Fox explained that while the exposure draft legislation had initially been a cause for concern, he believed the final minimum standards were more likely to allow alternative pathways instead of degree qualification.

“When the draft legislation was released on December 4, it included wording that concerned us,” he said.

“Not only us, it concerned the FPA, the Self-managed Super Fund Association, [advocacy group] CHOICE and Industry Super Australia.”

Forcing all existing advisers to study for a degree was not practical, especially considering the timeframe the government had allowed for the new professional standards, he said.

“So I don’t think that’s where we’re going to end up but if it’s not there, the question arises of what the alternative would be to show every adviser has reached degree standard,” Fox said.

“Reaching degree standard could be the exam, it could be doing a designation like the FCHFP, or it could be doing a Master’s.

“You don’t necessarily need a degree to go into those, so there will be pathways that are going to be available.”

However, Fox called on the government for clarity in the final draft legislation, likely to be released in the second quarter of the year, instead of waiting on a decision from the professional standards-setting board to be put in place under the new laws.

“The government has been able to, with the drafting of legislation, shift the responsibility from itself to this professional standards-setting body,” Fox said.

“It will be made up of what appears to be seven directors, the first of whom is the chairman appointed by the minister, and then the other six appointed will be an industry consensus group that will have a consumer representative in there, an industry representative, an ethicist and an academic.”

With so many stakeholders, it was likely the board would take some time to finalise the new professional standards, which could keep some advisers in limbo, Fox said.

“What the AFA would love to see is certainty in the legislation when it happens – most likely in autumn, that tells existing advisers where their end position is and not wait for this standards-setting body,” he said.

“Otherwise we’ll lose all of 2016, when the government wants all this completed by 2019.

“We simply don’t have the time to waste.

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