It is the less experienced advisers who are leaving the industry rather than more experienced advisers, according to the Financial Adviser Standards and Ethics Authority (FASEA).
In answering a question on notice by Liberal senator, Slade Brockman, on whether the authority was monitoring the trend that a disproportionate number of experienced, competent specialists were leaving the sector as a result, FASEA said there were most exits from newer advisers.
FASEA said an analysis of the Australian Securities and Investments Commission’s Financial Adviser Register (FAR) between July 2019 and December 2020 indicated that over 60% of those who exited the FAR during that period had less than 10 years’ experience.
“…only 7% of the exits represented advisers with more than 30 years’ experience indicating those less experienced advisers are leaving the industry at a proportionately higher rate than experienced advisers.”
Within the same answer, FASEA also noted that specialist advisers or stockbroker were not disadvantaged by the exam and that it might be that some firms just had better prepared advisers.
“Analysis of the composition of the 1,437 who have not passed the exam does not demonstrate a disadvantage between generalist financial planners and specialist financial advisers with a split of approximately 60/40% respectively composing those who had failed,” FASEA said.
“…The analysis shows the majority of stockbroking Australian financial services license (AFSLs) are performing well it the exam. Of the 20 stockbroking AFSLs, 14 had a pass rate greater than the cohort average.”
“FASEA considers this demonstrates the exam is not problematic to stockbrokers as a group, rather there are some firms whose advisers are better prepared than others to sit the exam.”