The Inbetweener: Please can firms hire fin planners with real financial experience, not just the RG146!

I was recently looking at the ASIC website (tragic, I know) to keep up to date with any changes in the industry. I was surprised to see that within wealth management, on what seemed a like mandatory basis, there were some rules for financial planners. One particular regulation sets out the need for advisers to provide advice appropriate to clients' needs.

But hasn't that always been the case? I got in touch with a few fin planner contacts whose knowledge I think highly of and asked if the rule seemed too obvious to them. The answer was a rousing: "of course!". So what has been happening? I turned to a number of websites and found that due to the expansion of the wealth management sector, there has been a growing demand for financial planners.

One thing that really caught my eye was the new trend of franchisee advisers. I am not referring to financial planners who have had years of experience with an institution and then get their own dealer's license. I mean there are now franchises offered where no financial services experience is required: they train you over a few months, you get your RG146 and then start up your own "business" from their referral network, or that's how it was explained. However, I couldn't actually deduce much more from the information I was given, so forgive me if I am factually incorrect.

Now, I know I sound extremely conservative here, but given these new supposedly "tighter" regulations within financial services, shouldn't we have stricter policies and educational requirements for those who are in charge of clients' money? You need a law degree to be a lawyer, a medical degree to be doctor, and a commerce degree to be an accountant, so why don't you need a finance degree to be a "doctor" of private wealth, or at least have a few years' experience within an organisation before you face clients?

Too many bad planners out there?

The RG146 qualification was a great start to weeding out bad eggs, but now it seems anyone can get their hands on it, despite their work experience and educational background.

I'm not being an education snob, but if I were to leave my money in the hands of someone else, I would want to know that he or she understands all aspects of my investments and of financial markets in general. I have a friend who was burned just over a year ago because her friend, who had left the fire brigade to become a financial planner, placed her in a fund for the trails. When the fund went into administration, she lost her money.

Perhaps I am overreacting to those fin planners who have no financial services background, no business/finance-related tertiary qualifications, and who think they are ready to advise clients after only a few months of training. These people are also potentially flooding the wealth management employment market.

I understand that this concept gives those who have dreamed of working in finance a leg-up into the business and that it might be a viable option for those left redundant by the GFC, but I fear it may give experienced financial planners a bad name due to mistakes made by novices, and possibly taint the reputation of the industry as a whole.

But tell me (in the comments box below), am I in the minority, along with my old fuddy-duddy financial planner friends? Are you a financial planner concerned for your own reputation? Or even a potential franchisee looking to start a new career who disagrees with me entirely? What do you think?