Labor to scrap FASEA education requirement
“An Albanese Labor government will properly recognise your experience,” were the words of Labor spokesman Stephen Jones this week when presenting at the Independently Owned Financial Advisers in Australia (AIOFP) conference.
The AIOFP has been among the staunchest critics of the massive increase in compliance and regulatory requirements being placed onto the sector, so it was natural that any political announcement would come at this event.
According to the presentation, if elected the Labor Party would effectively seek to ‘grandfather’ the higher education standards brought about due to the Royal Commission. It proposes to offer an exemption from the bachelor’s degree education requirement for those who have been operating in the industry for at least ten years.
“If you’ve been working for a decade as a financial adviser with a good record, a Labor government will not ask you to take that bachelor’s degree to keep your qualifications,” Jones explained. “We are going to assume that the ten-years-plus experience is worth at least a degree”.
But the big question must be, is it worth a degree? One the one hand, the industry cannot afford to lose a growing cohort of experienced advisers. But on the other, the industry that existed ten years ago, let alone five, is very different to the industry and expectations that exist today.
The policy call is clearly focused on improving the affordability of advice, with many suggesting that 30 per cent increase in the last few years to $5,000 is expensive and unattainable for many. Yet financial advisers are providing inexperienced investors with detailed plans for the management of their capital throughout their retirement, so should the question actually be, how much is this sort of advice worth? Not how much does it cost?