Hundredsof advisers nationwide have been forced to quit the financial planning industry after failing to comply with the new compulsory education requirements under Policy Statement (PS) 146.
A survey conducted byMoney Managementlast week of some of the top providers of financial planning services in the country — including the combined National Australia Bank (NAB)/ MLC group, Professional Investment Services (PIS), Count Financial, Westpac Bank, ING and AMP — found a high number of advisers have failed to meet the June 30 deadline to comply with PS 146.
The exodus is being led by NAB/MLC, where 50 of the group’s 1,700 advisers have had their proper authorities revoked after failing to comply with PS 146.
MLC general manager for adviser distribution Matthew Lawler says the 50 includes those who failed to pass the PS 146 testing procedures, as well as those who have decided to retire early to avoid having to comply.
It is a similar story at Australia’s biggest dealer group, AMP Financial Planning, which still has some 62 of its 1,800 financial advisers awaiting results to see if they have met the PS 146 requirements. The group’s managing director, Greg Kirk, is expecting as many as 50 of those advisers to fail.
At Westpac, 21 out of a total 700 financial planners initially failed to meet PS 146 requirements by the June 30 deadline, but have since met the requirements. At ING, three planners have failed to comply with PS 146, with the status of another seven still uncertain.
Meanwhile, at the Count Financial group, as many as 30 advisers have given up their financial planning licences rather than complete the PS 146 requirements. Count managing director Barry Lambert says most were inactive financial planners who will now concentrate on other businesses like accounting, or leave the industry entirely.
And at Australia’s largest independent financial planning dealer group, PIS, 35 out of a total of 1,200 financial advisers failed to meet the PS 146 requirements and will have their licenses taken away.
PIS executive council Graham Evans says many were older advisers who were planning to leave the industry anyway.
But the effect of PS 146 to hasten the departure of many, particular older, advisers has drawn strong criticism from some sections of the industry.
Joe Nowak, the president of the Association of Financial Advisers (AFA), says the exodus will rob the financial planning industry of much needed experience.
“In my opinion, a lot of good advisers…were forcibly put out of the industry,” he says.
Ken Bruce, the senior manager of education at the Financial Planning Association (FPA), says it will be up to the Australian Securities and Investments Commission (ASIC), which introduced PS 146, to prove its merits.
“If you are going to put all those training requirements in place, you should be able to confirm the outcome in some way,” he says.
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