Minister for Financial Services, Stephen Jones, believes the industry can return to 30,000 advisers but more pathways are needed as it is unrealistic to expect people to want to become advisers at 18.
Speaking at an event held by the Financial Services Council (FSC) this week, Jones referenced the dwindling in adviser numbers, which have fallen below 16,000, and how superannuation funds providing advice can help with this.
Research by Wealth Data at the end of the last financial year found there was 3.7 per cent reduction in adviser numbers, falling from 16,183 to 15,584.
He said: “A benefit, but not an objective, of looking at [super] fund-based advice and getting that scope of competence for the people providing that advice is you get that natural pathway. A natural pathway that we don’t have at the moment.
“People don’t decide at the age of 18 that they want to become a financial adviser or when they are an undergraduate. It is people who have worked in a bank or as an accountant or who have studied a commerce degree and then decided they want to do advice.
“There is a pathway to growing those 16,000 advisers to 30,000, again, but we won’t get there in two years’ or five years’ time. We have to be pragmatic about it and have more doors at the university level, such as by recognising components of other degrees and ensuring there is a logical pathway.”
He noted it is crucial for the industry and government to work out an educational pathway regarding what needs to be studied at an undergraduate level and what can be taught at a postgraduate level.
“We’ve got to work out what it is we want to be included that is recognised by the profession as essential at the undergraduate level and what can be postgraduate training. There are two universities offering financial advice degrees, and we are kidding ourselves if we think that is enough.
“I think we can get there, but just saying let’s use the existing setting and hope people will want to join at 18 is nuts.”
Last month, FAAA chief executive, Sarah Abood, said advice provided by super funds could be given by students of financial planning degrees.
“Firstly, people who are giving this advice, even as non-relevant providers, do need a level of education and a level of knowledge to enable them to give that advice in a way that is commensurate with the best interest of the client.
“You can’t take someone off the street and put them in a call centre, there must be education and specifically our view is we already have this education for financial advisers.
“Perhaps this is an opportunity where super funds could employ students of financial planning degrees who have completed relevant modules such as superannuation or retirement, but who haven’t completed a PY [professional year] yet but they could offer simple advice from a super fund in a way that is commensurate with the best interest of the client.”
By Laura Dew
Money Management
18 July 2023
