Financial planners are advising clients on their life savings having studied as little as five hours a week over a year - not much more than many hospitality courses at TAFE.
Though most planners do have higher levels of education and more ongoing professional development than the bare legal minimum, it leaves consumers exposed to planners who struggle to understand the complex advice many need.
The differences in educational attainment among financial planners make it hard for consumers to assess whether the person they are dealing with has the competence to offer a professional service.
The government, regulator, consumer groups and professional associations representing planners agree the minimum education required to give financial advice is far too low.
Just because someone is called a ''financial planner'' does not guarantee professional standards that consumers expect from doctors, lawyers or pharmacists.
However, the wheels are in motion to ensure planners have higher minimum levels of education - but they are turning slowly.
The Financial Planning Association (FPA) is leading the way on raising the levels of education for financial advisers. It has about 8500 financial planners as members, only about half of the estimated number of financial planners in Australia.
The bare minimum of education needed to give financial advice is four subjects (including a foundation course) that typically require about 60 hours of study each or the equivalent of about three months of full-time study. That will meet the requirements of Regulatory Guide 146, which governs minimum training standards for planners.
Further, the minimally qualified planner would have to work for a licence holder or be a representative of a licence holder, but it is little wonder the fledgling profession has had its fair share of bad apples.
The Australian Securities and Investments Commission (ASIC) maintains a register of approved training courses. But there have long been concerns that some organisations, which provide training to meet Regulatory Guide 146 and offer diploma courses, are more interested in chasing the revenue that comes from the fees charged for the courses than in lifting the educational attainment of participants.
Higher training standards are on the way but progress is slow.
Last year, the regulator said it wanted planners to pass a national exam to ensure they have the skills to perform their role.
Under the regulator's proposals, financial advisers would undertake a ''knowledge update review'' every three years and new financial advisers would have to be supervised for a year by a planner with at least five years' experience.
The new adviser would be able to give advice during that time but the advice would have to be vetted by the supervisor. The regulator is still consulting with the planning industry over its proposals and it intends to commence national testing from the middle of next year.
Meanwhile, the FPA is lifting its members' educational standards.
From July 1 next year, new members will have to have an undergraduate degree. Existing members without an undergraduate degree will remain members. ''There is no recognised profession in the world that does not have an undergraduate degree as its entry point, plus additional studies and experience requirements,'' the chief executive of the FPA, Mark Rantall, says.
The FPA promotes its Certified Financial Planner (CFP) certification as the ''gold standard'' of financial planning. The CFP designation now requires an undergraduate degree and professional experience, among other things.
The FPA has about 5600 CFPs out of its total membership of more than 11,000 members. ''We are interested in ensuring that we have the highest standards and the best-educated planners in the marketplace,'' Rantall says.
The Association of Financial Advisers (AFA), the other major association representing planners, has about 2500 members. The chief executive of the AFA, Richard Klipin, says the association does not have plans to make an undergraduate degree the minimum qualification for membership.
''We are not mandating membership with minimum degree qualifications,'' he says.
''We will encourage learning and foster learning and we have a range of programs on offer and professional development requirement of 30 hours per annum. We have taken a philosophical view that to encourage and motivate is the better option, but the issue is in play.''
Most employers do require higher education and training levels than the bare legal minimum. Most require at least a diploma-level qualification such as a diploma of financial planning or financial services, which typically requires between six and 10 courses to be completed at up to 600 hours of study, usually completed part-time over two years.
Several aspects of the government's reforms to financial planning will help lift professional standards, including educational levels. Under the government's reforms planners will effectively be forced to join a professional association.
Under the reforms, as long as the associations have their codes of conduct approved by ASIC, their members will be exempt from opt-in. The opt-in rule requires advisers to get consent from clients, who pay asset-based percentage fees, every two years to establish if they wish to continue.
That will be a powerful incentive for planners to join an approved association and abide by the association's professional standards.
Another reform is for the term ''financial planner'' or ''financial adviser '' to be recognised in law.
The government has said that it will table legislation in parliament by the middle of next year to enshrine the term in law. It will likely mean no one will be able to call themselves a planner or adviser without being a member of a recognised professional association.
The other big change - pending the final passage of legislation through parliament - is that planners will be put under a legal obligation to act in the best interests of their clients and to place the best interests of their clients before their own when providing advice.