This means that existing financial planners must meet the new standard by 1 January 2024 or cease to practice.

Recent surveys indicate that a significant proportion of existing advisers do not intend to undertake the study requirement and will leave the industry. These figures range from a high of 75.6% (an iFA Magazine survey) to 16.5% (a Coredata survey). In September 2017 Deakin University Professor Adrian Raftery suggested that between 21% and 34% of advisers would retire or change careers. Whatever data set you look at, it’s fairly significant.

I, along with many of my colleagues, have been long been strong advocate for higher education standards for financial planners. As far as I am concerned the writing was well and truly on the wall that standards would eventually lift dramatically. Whilst it has certainly taken a long time to achieve, there is no excuse for failing to read the signs of change and its justification.

The Financial Planning Association (FPA) has been advocating a degree based standard for 20 years. I recall when I was a director of the FPA in 1998 we met with ASIC directors and strongly expressed our views about the absurdity of the legislated education requirement, which was at then, and until recently, the equivalent of certificate standard – not even at diploma level. Their response was that it was a legislative matter and industry would determine the progress of standards.

It has been a tough fight for advocates of the profession to overcome the vested resistance of “the industry” led by the banking lobby, who did not want to make the investment in higher qualified advisers.

I find it astounding that such large numbers of financial planners have ignored the clear trend to increased competency of the profession and have done nothing to increase their level of education so obviously appropriate for someone who purports to be a professional adviser.

At Hewison Private Wealth we established a degree based education policy standard in 1995, which fed into an adviser mentoring program. This required the completion of the post graduate Certified Financial Planner (CFP) certification standard and attaining sufficient experience to justify the title of Financial Planner/Financial Adviser.

So I have little sympathy for those who have failed to heed the warnings and are unwilling to undertake the study required. But on the positive side, we have seen a huge influx of degree educated young men and women enter the profession over the past 20 years and expect this to continue.  

Whilst there is no guarantee that education standards alone equate to ethical behaviour, it is a necessary starting point. In combination with professional Practicing Standards, Codes of Ethics and a solid disciplinary regime, Australians can be confident they will receive unconflicted and competent advice.