The incoming education and professional standards framework for advisers, to be established by the Financial Adviser Standards and Ethics Authority (FASEA), could decrease adviser numbers in the SMSF sector, as well as turn experienced practitioners off from working in the sector altogether.
Speaking at the SMSF Association National Conference 2018 in Sydney last Friday, association head of technical Peter Hogan said the session on professional education standards, made the day before by FASEA chief executive Deen Sanders, was a good opportunity to understand the authority’s thinking on the new guidelines.
However, Hogan emphasised the real negative repercussions for the SMSF industry if the standards were found to be overreaching.
“My greatest regret at the end of this process is if we lose the knowledge that experienced advisers have after 20 or 30 years’ worth of working in this industry because they can’t meet, or have no desire or appetite, to meet those standards and then leave the industry,” he told delegates.
“Also, I think that one of the most important things about our profession is that the people who have been working in it for many years are mentors and guides for people who are new to the industry.
“New [practitioners] have to learn how to pass on that knowledge to their clients in a way that they can understand.”
The association has previously stated its support for improved and more comprehensive education standards for the industry.
“We don’t see that as a negative, but we do have concerns as to how we’re going to get there,” Hogan said.
“We’re all facing the prospect of some kind of education journey.
“To some extent, I feel that Deen is the messenger getting shot, but he has legislation and a board that’s telling him how to interpret that legislation, and Deen will no doubt also make recommendations.”
He said the industry was slowly starting to gain a better idea of what the education and professional framework for advisers could entail.
“But we obviously have a lot more information to come,” he said.
“All we can hope for at this stage is a clearer picture of what they’ve got planned.”
During the second day of the conference, Sanders explicitly said financial adviser designations and experience did not equate to qualifications under the framework FASEA was establishing.
“The reality of the law is a little more blunt than that,” he told delegates.
“As we’ve indicated, there is an exercise in raising standards. There is an exercise in being qualified.
“The question of how you get there is quite different.”