Six years on from financial services reform, the job of industry educators has changed dramatically. In 2001, education providers flourished as experienced financial planners clamoured for PS146 qualification before the March 11, 2002, deadline.
Today's challenge for educators goes beyond PS146 competency towards equipping young advisers, many in their first job, with vital soft skills.
In a push towards professionalising the financial planning industry, the FPA has announced it will recognise soft skills gained in mentoring and on the job experience in its continuing professional development (CPD) system.
IFA gathered educators, a dealer group head and an FPA director to discuss Australia's financial planning landscape.
Deen Sanders: The FPA in its position as the key industry association is obviously interested in all things educational: how do we incubate financial planners, how do we professionalise them, how do we inform them?
As a consequence I think we do tend to see in the FPA's role, I would suggest, 98 per cent of all education. The FPA, as you know is not a deliverer of education itself ... I'm absolutely happy to inform the industry that we are changing that stance quite considerably. Over the next six months we will be looking to again engage with educators in terms of what the markets need to be doing.
IFA: Tim, how involved do you get in the provision of education for your practitioners and new hires?
Tim Browne: I'm three months into the role as general manager of Financial Wisdom and I've been concentrating my activities on spending time with advisers. When I've been talking with advisers they get most passionate about being able to spend time with clients, helping them make smart decisions about their financial position, so that's the fundamental thing that drives a lot of my advisers.
For us as a licensee, it's my view that we exist to enable advisers to deliver great advice to clients. Clearly in order for us to fulfil that role we need to provide high-quality training - formal and informal. That's absolutely vital.
DS: Part of the problem is that what we measure is these event-style education experiences . what we're missing is the recording of good constructive educational experiences that occur in their professional daily engagements. That's the stuff that's not been recorded and captured within their profession.
IFA: John, why is this a good time for you to get back into education?
John Prowse: We think the really large organisations can't look after the niches as well as smaller players can, so we think there's an opportunity there. And we think the industry doesn't necessarily want a monopoly of training. IFA: So what niches have you identified? Obviously you think Kaplan is missing a trick somewhere?
JP: Not necessarily; it's probably the degree of customisation. I think there are probably four things that I think are challenges for training. One is the assessment of soft skills.
The second big challenge is how the lower market gets looked after . I think if you look out in the community today, the main financial problems out there are about debt management and getting budgets under control. [They're] very straightforward commonsense matters that need straightforward commonsense advice and certainly a high degree of personal skills to persuade people to change their behaviour, but not necessarily masters level academic training.
The third one is cheating. I think cheating is a big problem. The last one is the one the FPA and the whole industry's been struggling with for ages and that's how to remove the conflicts of interest with commission-based remuneration.
IFA: Warren, what's your standpoint on education in the marketplace? And how is the deal with Finsia and Tribeca projected to go in the future?
Warren Jacobson: I think broadly our challenge is the same challenge for the industry and that's how we can add value beyond the base case inherent in competency-based education. What we're finding, particularly because of the skills shortage, is there's an increased opportunity to build education into our clients' value propositions to act as an attraction and retention tool for planners and to give them a clear sense of a career pathway.
I think the other thing we're finding is because of the growth in the wealth management industry and the skills shortage, there's a compression between the classroom and the client. And so again the requirement goes beyond simply the need for solutions that address competency. There's a requirement for solutions that address skills, softer skills, practical application of knowledge and so forth.
IFA: Mark, where do you fit into the educational landscape?
Mark Sinclair: I think there's a lot of talk about the big picture, where the industry's going, what the trends are. For me the most important thing is the local market; it's the student focus. There's a huge appetite for a better student experience.
Students want great courses, terrific teachers and facilitators and they want the course to be skills-based and practical.
Our key focus is to make sure the student experience is as effective as possible. For our students, which are about 3000 a year, there's a significant portion that are dissatisfied and coming from our major competitors, some of whom are round the table.
IFA: And why do you think they're coming to you? What are the major reasons?
MS: Because when they ring up for student support they get no response, no feedback. When they email they don't get a response. If there's an ambiguity in the response that they've got for the questions, there's no right of reply. The courses are outdated and have errors in them, they're not skill based. We get those comments time and time again from students that just say they're sick and tired of a particular provider and they come across to us.
IFA: How are you priced compared to your competitors?
MS: The market doesn't appear from our perspective to be price sensitive. They actually want a quality experience.
They've got an objective, which is quite often a career change, so it's financially motivated. They want to get a job lined up, they want to get into the industry or they want career advancement.
The answer to your question is that we generally peg our prices to what the industry expects, so there's a degree of uniformity in the prices in the market.
John, you mentioned the issue about cheating, for example, in the industry. I think there's no better way to assess someone's knowledge than through skills assessment.
JP: I wasn't singling out the industry, by the way, on that point. I think it's a problem across education generally.
DS: It is one of the reasons why, despite all the educational avenues, the FPA will maintain and will forever maintain its certification obligations. We will not outsource the obligation of professional certification because at the end of the day you must be able to stand behind this character and say "this person is a professional member of the industry". IFA: When you're employing new planners, how much emphasis do you place on where they got their qualifications, what their background is, what their educational standard is?
TB: We're very interested in what their history is. Part of that's education and part of that's compliance. Part of it is their perspective on advice.
IFA: But would you look at whether your candidates have got qualifications from Mark, John or Kaplan? Would it matter to you?
TB: Yes it does. We have a longstanding relationship with Finsia and Tribeca. It'll be under review now that the two have come together.
IFA: What's your gut reaction to the two coming together?
TB: My gut reaction is let's keep an eye on it. Let's make it so that the quality remains, the responsiveness remains and that the economic side of it makes sense for us.
IFA: What about you, Mark? Do you see an opportunity in it?
MS: Yes. We think most dealer groups are looking and thinking about the situation as Tim is suggesting. Again these issues of quality, responsiveness and economics are important, but so is the ability to actually customise the program so it includes your statement of advice, your financial services guide, practical examples, using your software where appropriate. Those type of things have become more and more important.
