Planners preparing for change
REFORMS to the financial services sector will dramatically affect the training requirements to become a financial planner and are expected to cause a mass shortage of advisers as early as next year.
Financial Planning Association chief executive Dante De Gori says the reforms mean there will be no new financial planners until 2020, while others have predicted up to a third of existing advisers will quit the sector by 2024.
“[The reforms] will definitely create a shortfall of financial planners,’’ Mr De Gori said.
“We’re going to have a group of [current] financial planners that are not going to stay [in the industry] but, equally, the future supply [of financial planners] is also going to be much smaller — we just won’t have anyone [new] until at least 2020, so it’s a double whammy,’’ he said.
Under Federal Government changes to the financial services sector, all new financial planners must hold an approved university degree and complete a year-long internship, as well as pass an entrance exam, before they can practise.
Existing financial planners must also pass an exam and complete a standard equivalent to an approved degree by 2024 to remain in the industry.
The government is yet to finalise its list of approved degrees but Mr De Gori says in some states, such as South Australia, it is doubtful an approved degree will be available on campus in time for the reforms to start next year, leaving online study as the only option.
People’s Choice Credit Union financial planning head Shaun Bitter says he is preparing staff that the “worst case scenario” is to presume they have to undertake a masters degree to remain employed.
“[If the government agrees to] anything less than that, well, it’s less work for you,’’ Mr Bitter says.
“Lifting the standards [for financial planners] is not going to be a bad thing.
“If you want to make it a profession, you need to do this.
He says doctors, lawyers and other professionals are “continually pushing the boundaries” by learning new skills. “We need to look at upskilling, too,’’ Mr Bitter says.
Business degree student Mary Hadgis, 20, and commerce graduate Robert Daniele, 21, have both secured roles with People’s Choice Credit Union but their qualifications will no longer be recognised, requiring them to undergo additional training.
Both planned to do postgraduate studies in financial planning even if the reforms had not required it, so are not concerned about the extra demands.
“In any career, you should be looking to upskill,’’ Ms Hadgis says.
“Especially in a role like financial planning, where you work so closely with someone to put them in a better position — [ongoing] education is required to be able to do that.’’