Knowledge is power
So wrote Francis Bacon, the Elizabethan equivalent of James Bond. As a baby-boomer brought up with a traditional focus on education, I’m inclined to agree with the early-day espionage agent.
The relevance of education is not lost on the stakeholders in the current Financial Advisers Act review process, and while the discussions continue, let me state an adopted position after giving the issue considerable thought.
Anyone holding themselves out to be a financial adviser should be qualified to give financial advice in their chosen area(s) of practice.
In the contemporary world the definition of a profession has acquired certain specific characteristics, one of which is the need to be qualified by examination. Medicine, Law, Accountancy, etc., are vocations entered by tertiary level qualification, and while a degree level entry qualification may set the bar too high currently, I believe it is an aspiration all financial advisers should hold.
Of course, this doesn’t guarantee universal excellence – David Ross was a qualified accountant – but it does point to an industry seeking to improve practitioner knowledge and expertise.
After all, nobody would consult with a part-time or unqualified heart surgeon, so why would a consumer place their financial future in the hands of someone who cannot display at least a minimum level of competency?
Prior to the last minute changes to the legislation in 2011, when we expected all advisers would have to be qualified, the dealer group to which I was then consulting, had taken every member through Standard Set 1 and all had acknowledged the need to qualify by examination.
For those who are unwilling, I urge you to reconsider. I suggest that your experience will take you through the exams – even if a measure of studying is required to back up your track record in the industry.
But this approach to education is not taken in isolation.
As mentioned previously, the areas under review impact on each other, and the education issue is no different, with implications for designation, remuneration, and the ‘Sales v Advice” issue.
But more of this later.
For the meantime, promoting confidence in the adviser industry will be significantly enhanced if all those claiming the title of financial adviser are able to display at least a minimum level of competence, education, and ability.
The immediate implication of this goes to the issue of designation – more to follow.