There is a vast array of expertise, training, qualification and ongoing development
that is required to become, and remain a financial planner
There are many different business professionals offering almost as many services in today’s personal finance world. When it comes to financial planning, as could (and should) be expected there is a vast array of expertise, training, qualification and ongoing development that is required for qualified financial planners not only in Australia, but across the world.
A financial planner has several core duties:
Although there were many pathways prior to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, there are not far more stringent guidelines to becoming and maintaining your status as a certified financial planner in Australia.
In 2019, new education and training standards were imposed upon all existing and future financial planners and advisors to ensure you as the client receives the very best in advice and service.
According to the ASIC website, in relation to the qualification, exam and professional development of financial planners, existing financial advisers must bring their qualifications up to an approved degree or equivalent level to meet the education requirements.
They must have an approved bachelor’s degree (AQF7 level) or above or equivalent. The maximum requirement is an approved graduate diploma (AQF8 level) comprising eight subjects.
Depending on their current qualifications, an existing financial adviser may only do bridging courses, such as the FASEA Code of Ethics (if it was not included in their qualification).
For new financial advisers, the minimum education requirement is an approved bachelor’s degree (AQF7 level) comprising of 24 subjects, or above or equivalent.
Where a new financial adviser already holds an appropriate qualification, they can meet the education standard by attaining an approved graduate diploma (AQF8 level) comprising eight subjects.[2]
How is this enforced in financial service firms?
Within a financial services firm, there must be an AFS licence, or Australian Financial Services licence held by one or more senior parties to the business. A business providing financial services must hold an AFS licence.
Your financial planner will need to have a current AFS licence or be a representative of a licensee from the day they start your financial services consultation.
However, ASIC notes that consumers should be aware that the licensing process is a point-in-time assessment of the licensee, not of its owners or employees. Holding an AFS licence does not guarantee the quality of the licensee’s services.[3]
Why is the education level of a financial planner important?
Seeing that holding the licence “does not guarantee the probity or quality of the licensee’s services,”[4], it is vital that consumers know that your financial planner is not just picking ideas from the newspapers and presenting them to you.
Having completed a bachelor’s degree and subsequent post graduate diplomas, your financial planner needs to continue their studies with CPD or compulsory professional development. Within this training they develop their technical and ‘soft skills’ within their profession.
This continuous development ensures that clients have a financial planner that understands the current laws, that is only providing the most up-to-date advice, and that any advice you receive is from someone who has spent the best part of a decade in achieving their qualification to be sitting in front of you.
Although financial planners may differ in their approach, they access to information, their use of tools and technology, you can rest assured that they are qualified to do so when they are a member of the FPA (Financial Planners Association), are a registered CFP (Certified Financial Planner) and are the holder of a FSL ( financial services licensee).
One final recommendation before you commence with any financial planner, is to ask to see their up to date credentials to this effect, thus proving to you through your due diligence that they are certified to plan your financial future.
[1] https://www.seek.com.au/career-advice/role/financial-planner
[2] https://asic.gov.au/for-finance-professionals/afs-licensees/professional-standards-for-financial-advisers/qualification-exam-and-professional-development/
[3] https://asic.gov.au/for-finance-professionals/afs-licensees/
[4] https://asic.gov.au/for-finance-professionals/afs-licensees/