Speaking to SMSF Adviser, Mayflower Consulting managing director Sarah Penn said that, in many ways, the new professional standards for financial advisers “will end up being another nail in the coffin for the limited licence”.
“There is no carveout under FASEA for those on a limited licence, so anyone under a limited licence has to make sure that they’re degree-qualified,” Ms Penn said.
“If you’re already an accountant, there are not a huge number of extra units that you have to do, but there are certainly some, not zero.”
Accountants, she said, will still need to do a few units in most cases and some will consider whether it’s better to become qualified as a full financial adviser so that they can provide a much broader range of services to their offering.
“If you have to go and do four units just so you can help your SMSF clients set up their pension, then that’s not a good return on investment,” she said.
“I haven’t heard many accountants say that they will do the extra modules, but I think for the new people coming through the system, if you’re already doing a business degree and an accounting degree, I think adding on the additional units to end up with a financial planning degree will be worth it.”
Ms Penn said that she expects joint accounting and financial advice degrees will become increasingly common, particularly for those entering the accounting or financial advice industries.
“There is a lot of crossover between accounting and financial advice. They’re not the same by any stretch, very different people tend to gravitate towards one or the other, but I think over time the two will merge, and financial planning might even just become more of an extension of accounting, rather than a completely different thing.”
Ms Penn previously predicted that limited licensing would eventually be scrapped by ASIC given the scarce take-up and the issues with its implementation.
As with other types of new legislation, she said that there have been many “teething issues” with the limited licensing regime.
“This would be fine if it was an industry-wide thing and everyone had this new licence, [because] ASIC and industry would then have to figure out how to make it work, but there’s only a few hundred licences out there,” Ms Penn said.
“I don’t think anyone at a policy level has the interest or the time to try and figure out all these teething issues, and really, there’s not very much advantage of a limited licence over a full licence.”
All very well suggesting full licencing, but with a limited licence and my own accounting business I don’t qualify for a full licence due to the work requirement. After over 30 years in business do I close up, sack my staff and get a job with a financial planner? Don’t think so.
FFS – absolute nonsense – if you are an accountant or completed and accounting degree a Financial Planning “degree” is a waste of breath, time and money. Accountancy degrees covers all of the principle in finance as well. A financial planner does not costing, DCF, Cost of Capital, Taxation, Risk etc. Accountants learn all of this stuff. Further after 3 yrs working and completing your studies you are well equipped technically to take on any financial task. Wake up this FAESA garbage is designed to get independant accountants out of fin planing because as a trade we tell people how it is. FAES is designed by the banks, industry funds and govt get a greater shares of the publics money. Wake up Australia.
Furthermore remember Uni is to get a job, not waste your life away, repay a hecs debt that you cannot afford and prevent you from having what that garbage people crap on about – oh yes – life work balance. Thats for govt employees and large corporates.
All the RG Bargee and now they may scrap it. I as an Accountant was able to properly advise my SMSF clients before all this ASIC / Government nonsense. It is hard work now with your mouth duct taped and your hands tied behind your back.
Agree, parts of Accounting and Financial Planning are 2 sides of the same coin and the best practitioners benefit from being skilled in both qualifications. However, there will always be outer ranges of both professions that will attract specialists from each field and accounting degrees, as well as Financial Planning degrees should cater, via electives subjects, for that specialisation.
It would be great to see a bit of forward thinking from educational institutions in the design of future offerings.