By Daniel Paperny
Higher qualifications and ongoing training have the power to transform financial advice, but the industry is yet to realise the full potential of educational technology (edtech) innovation and its applications to this sector, according to Adviser Intelligence.
In a recent blogpost, Adviser Intelligence chief executive Jacqui Henderson said while regulators like ASIC were looking closely at regulatory technology (regtech) for risk minimisation, advisers could benefit from edtech innovations to inform their professional development and “shave the compliance burden” in the long term.
She said edtech could complement other educational pathways as advisers transitioned to the new professional standards regime.
“With higher education standards now a formative part of the advice sector, we [should] also expect the emergence of ‘edtech’ as the newest offshoot on the horizon,” Henderson said.
“After all, if regtech is the new fintech, it would follow that higher education and ongoing training may certainly shape – or at least complement – the face of financial advice technology in Australia.”
The comments followed the passage of the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 through the Senate last month, aimed at lifting the integrity of financial planning as a profession and improving the quality of advice.
The legislation, which is set to be enforced from 1 January 2019, stipulates that new entrants will need a “relevant degree” and be required to complete a structured work experience program, known as a “professional year” of supervision, as part of their educational requirements.
Existing financial planners will be expected to reach a degree-equivalent standard by January 2024 to comply with the incoming regime.
Henderson said while the official uplift in professional standards might “cause concern at the margins”, the change was centred more on “pace than direction” for the financial planning sector.
Responding to what she described as a “relentless regulatory offensive”, Henderson said advice practices would increasingly turn to technological solutions to reduce the friction and ease the compliance burden in the shift to the new regime.
But she cautioned that the transition would not necessarily be a smooth.
“The historical experience of financial planners in Australia is proof that adjusting to new compliance regimes – no matter how much practice you’ve had – is never easy,” she said.
“Financial advisers have less than four years to be ‘regtech ready’ for the new regime. Whether we see some form or supporting ‘educational tech’ emerge remains to be seen.”