Mentor Education - Adviser Education Survey - 14 June 2016

Prepared in conjunction with CoreData

Financial Planning Future Professional

Education Requirements Survey

2016


Contents

2

Methodology 3

Background 7

Key Findings 10

Thank-you & Contact Details 16

Prepared in conjunction with CoreData 3

Methodology


Sample size of 540, including 400 financial planners

The report is developed from the collection of quantitative data gathered during April and May 2016.

The data was collected via an online survey that was sent out to financial planners, mortgage brokers and accountants through a variety of channels. These included CoreData’s database of 12,000 financial planners, 5,000 mortgage brokers and 5,000 accountants, as well as Mentor Education’s database.

These efforts resulted in 540 valid responses from advisers, including 400 financial planners, 86 accountants and 54 mortgage brokers.


Demographics

5

Valid PercentFemale 23.7%Male 76.3%Total 100.0%

Valid PercentUnder 30 8.9%30 – 39 20.6%40 – 49 27.6%50 – 59 27.4%60 and above 15.6%Total 100.0%

Valid PercentACT 1.3%NSW 34.4%NT 0.4%Qld 20.9%SA 8.1%Tas 2.0%Vic 23.9%WA 8.9%Total 100.0%

Gender

Age Banded

State


Majority aware of proposed legislation

6

• In the Corporations Amendment (Professional Standards of Financial Advisers) Act 2015, the Government sets out the education and training standards for a person who is, or is to be, a relevant provider of financial advice/services. These standards stipulate that the person:

• Has completed a Bachelor's degree, or equivalent qualification

• Has undertaken a year of either or both work and training that meets the requirements

• Has passed an approved exam, and• Meets the requirements for continuing

professional development.• The large majority (77.2%) of respondents were

previously aware of this development. Awareness is highest among financial planners (82.0%) and lowest among mortgage brokers (46.3%).

Were you previously aware of this development?

Yes77.2%

No22.8%

Proposed Legislation


Background


FP as profession, within a framework of integrity

http://www.fpsb.org/wp-content/uploads/2016/01/151027_doc_CompetencyProfile_FINAL-2.pdfFinancial Planning Standards Board

• Cognitive Competence• Functional Competence• Social Competence


• The Financial Planning Process

• Financial Plan Construction

• Client Relationships

• Insurance

• Superannuation &

retirement planning

• Investments

http://fpa.com.au/wp-content/uploads/2015/09/FPEC_accreditationandcurriculumconsultationreleaseversion16Nov2012.pdf

FP education in Australia reflecting world’s best practice

Financial Planning Education CouncilNational Financial Planning Curriculum (Core Knowledge Areas)

• Estate Planning

• Taxation

• Fund Analysis

• Business Economics

• Commercial Law

• Business Statistics

• Accounting

• Services Marketing


Key Findings


65.2%2.2%

21.7%

10.9%

47.0%

1.1%

32.2%

19.6%27.0%

3.0%

50.4%

19.6%

Financial advisers should be required to

undertake a year of work and/or

training

Financial advisers should be required to complete a

Bachelor's Degree or an equivalent

qualification

Financial advisers should be required to pass an exam to ensure consistent

minimum standards of

knowledge and practice

Yes, new advisers only Yes, existing advisers only

Yes, both new and existing advisers No

11

Only one in five do not see value in a Bachelor’s Degree for advisers• There is broad support for requiring

financial advisers to complete a Bachelor’s Degree or pass an exam.

Do you think that …?

4 in 5 see value in degree, exam & professional year

• More than four in five respondents support the requirement for financial advisers to complete a Bachelor’s Degree or an equivalent qualification or a national exam for financial advisers (both 80.4%). Close to nine in 10 (89.1%) support advisers undertaking a year of work and/or training.


55% feel a degree will professionalise the industry

12

A degree in financial planning is a step towards professionalising the profession• There is a widely-accepted belief

that a degree in financial planning will professionalise the financial planning profession, with more than half (55.0%) of respondents holding this view.

• Around half (49.4%) say it will improve consumer confidence in seeking financial advice, while close to two in five (38.7%) say it will help overcome the negative public image of the profession.

• Almost none of the respondents think that it will increase the cost of advice.

If a degree in financial planning becomes the minimum requirement for financial planners,

what impact do you think this will have on the profession?

55.0

49.4

38.7

31.7

19.1

6.7

1.9

6.9

8.3

0 20 40 60

It will professionalise the financial planningprofession

It will improve the confidence of consumersin seeking financial advice

It will help overcome the negative publicimage of the profession

It will lead to higher ethical standards andpractices by financial planners

It will broaden the scope of servicesfinancial planners will be able to offer

Advisers will be forced out of the industry

Increase cost of advice

None

Other

% Yes*Multiple answers allowed


• Close to three in four (74.3%) respondents believe that a 24-subject Bachelor’s degree with a broad scope of financial planning will be the most effective at professionalising the financial planning profession.

Which higher education qualification do you believe will be

the most effective at professionalising the financial

planning profession?

75% support a 24-subject Bachelor of FP degree

74.3

25.7

0 20 40 60 80

A 24-subject Bachelor’s degree with a broad scope of financial planning

subjects

A 24-subject Bachelor’s degree in a related discipline (e.g. Bachelor of

Commerce), but with a narrow scope of financial planning subjects

%


Currently providing advice in over 20 product areas

14

A significant number of advisers provide or intend to provide advice in 20 financial advice product areas• For example, more than one in two

advisers (52.9%) provide (30.7%) or intend to provide (22.2%) aged care advice.

• Aged Care is not currently a subject in any current bachelor or masters degree in financial planning in Australia, despite the size and emerging needs of the Baby Boomer demographic.

Which of the following do you currently provide, plan to provide

and do not plan to provide financial services advice on?

72.068.1

63.362.6

57.255.9

50.447.8

43.742.0

38.135.0

30.728.1

22.422.0

18.017.4

13.55.7

10.010.2

12.813.1

12.211.9

18.714.322.0

13.518.0

19.622.2

15.016.5

13.513.39.3

10.012.4

0 15 30 45 60 75 90

Superannuation adviceLife insurance adviceRetirement planning

Investment adviceBudgeting advice

Debt and cash flow management adviceEstate planning adviceSocial security advice

SMSF adviceTaxation planning advice

Inter-generational financial wealth adviceSuccession planning advice

Aged care adviceMargin lending advice

Investment property adviceShare trading advice

Mortgage broking adviceAccounting advice

General insurance adviceDerivatives advice

%

Currently provide

Do not currently provide but intend

to provide

Subjects in current degrees

Subjects not in current degrees


Ethics paramount for adviser of the future

The most important attribute of a financial adviser of the future is:• ‘ethical, acting with integrity in

intellectual, professional and community pursuits’ (with an average ranking score of 9.9 out of 10).

Followed by:• ‘apply disciplined knowledge,

principles and concepts’ (6.6); and• ‘critical thinking and creative problem

solving’ (6.2).

What are the most important attributes of a financial adviser of the future?

9.9

6.6

6.2

2.5

2.4

1.7

1.4

1.2

0.7

0.5

0.2

0.2

0 2 4 6 8 10

Ethical, acting with integrity in intellectual,professional and community pursuits

Apply disciplined knowledge, principles andconcepts

Critical thinking and creative problem solving

Access, evaluate and synthesise information

Active and lifelong learners

Teamwork and communication skills

Use technologies appropriately

Global in outlook and competence

Culturally and socially aware

Sustainability-focused, responding toecological, social and economic imperatives

Environmentally aware and responsible

Other

Average ranking score (0 - 10)


Thank you & contact details

t: 0410 484 037e: [email protected]: mentor.edu.au

Mentor Education - Adviser Education Survey - 14 June 2016

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