Minister for Financial Services, Stephen Jones, believes the industry can return to 30,000 advisers but more pathways are needed as it is unrealistic to expect people to want to become advisers at 18.
Speaking at an event held by the Financial Services Council (FSC) this week, Jones referenced the dwindling in adviser numbers, which have fallen below 16,000, and how superannuation funds providing advice can help with this.
Research by Wealth Data at the end of the last financial year found there was 3.7 per cent reduction in adviser numbers, falling from 16,183 to 15,584.
He said: “A benefit, but not an objective, of looking at [super] fund-based advice and getting that scope of competence for the people providing that advice is you get that natural pathway. A natural pathway that we don’t have at the moment.
“People don’t decide at the age of 18 that they want to become a financial adviser or when they are an undergraduate. It is people who have worked in a bank or as an accountant or who have studied a commerce degree and then decided they want to do advice.
“There is a pathway to growing those 16,000 advisers to 30,000, again, but we won’t get there in two years’ or five years’ time. We have to be pragmatic about it and have more doors at the university level, such as by recognising components of other degrees and ensuring there is a logical pathway.”
He noted it is crucial for the industry and government to work out an educational pathway regarding what needs to be studied at an undergraduate level and what can be taught at a postgraduate level.
“We’ve got to work out what it is we want to be included that is recognised by the profession as essential at the undergraduate level and what can be postgraduate training. There are two universities offering financial advice degrees, and we are kidding ourselves if we think that is enough.
“I think we can get there, but just saying let’s use the existing setting and hope people will want to join at 18 is nuts.”
Last month, FAAA chief executive, Sarah Abood, said advice provided by super funds could be given by students of financial planning degrees.
“Firstly, people who are giving this advice, even as non-relevant providers, do need a level of education and a level of knowledge to enable them to give that advice in a way that is commensurate with the best interest of the client.
“You can’t take someone off the street and put them in a call centre, there must be education and specifically our view is we already have this education for financial advisers.
“Perhaps this is an opportunity where super funds could employ students of financial planning degrees who have completed relevant modules such as superannuation or retirement, but who haven’t completed a PY [professional year] yet but they could offer simple advice from a super fund in a way that is commensurate with the best interest of the client.”
Hon Minister Jones should seek advice from the Australian Commonwealth Actuary about the number of financial advisers needed for a population of 26 million in order to implement Quality of Advice Review. My intuitive estimation is 1% of population or 260,000 financial advisers to have a quality vibrant advice profession. Minister Jones, 30,000 is only a water droplet in a bucket and will never compensate for the opportunity cost on the bushfire of the lack of qualitative financial advice in Australia. By comparison, the household savings ratio in Asia was 44%. Excluding SGC, what is the household savings ratio in Australia?
Stephen Jones is either delusional OR he is again indulging in corporate dribble-speak. Our once-great industry, decimated by the likes of Jones, will have less than 10,000 advisers by 2026 and next to zero risk specialists remaining. How can it be anything other than that? Risk advisers have had commissions cut below sustainability and can have THAT pittance whipped straight back off them any time in the first 2 years of a policy’s life, without notice. Investment planners are up against the politicians with onerous profit-sapping unnecessary compliance measures and an embolden super industry.
One of the commentators here opined that Jones “has no idea”. While tempting to agree with that I think Jones knows exactly what he’s doing – wiping out the remaining independent adviser force like the super funds and insurers want. Trouble is, the super funds will flourish but the insurers will wither and wilt on the vine. Client best interest never had a chance and is the LAST thing these politicians and big end of town consider.
So we are forcing out people with 30 years experience and 30 years of CPD as they are “unqualified” but letting students and backpackers in.
Is this a Monty Python sketch?? No it can’t be. Monty Python has never been this utterly ridiculous.
There is no interest like a vested interest heh Mr Jones!!
Mr Jones is kidding himself.
In 10 years the politicians and vested interests did their best to destroy the Life insurance industry and the Financial Planning profession.
You got rid of tons of experienced Professionals in that space with no hope of ever replacing what you destroyed.
To put it quite simply, none of those people with the kind of knowledge or experience is around to pass it on to the next generation.
You will have a better chance of recruiting the Tooth Fairy, the Easter Bunny and Santa Claus into this profession if you believe the nonsense, Jones is putting out.
There is no need for 30,000 professional advisers. There is no need to allow unqualified backpackers to give “advice”.
There is just an urgent need to fix the hot mess of bad regulation, so that existing advisers can service more clients at a lower cost. Jones is deliberately delaying any fixes to bad regulation, so he can use an “adviser shortage” as the excuse to allow union super funds to give conflicted, unqualified, “advice”.
I’m currently ringing businesses up and selling Solar Panels. I’ve not got any education qualifications and no experience in finance but I’m very good on the phone and selling. I’m looking forward to calling myself a “Financial Planner” too after completing my 2 week training course at AwareSuper…I think salary sacrificing is a good way to get ahead..Did I say that right? The FAAA have already signed me up too.
Why is it that we seem to have gone “full circle” with this latest report ?? From having everyone overly qualified for what they do ! To allowing employees of super funds with little or no experience offer advice ( call them what you will ) but they will create “ havoc” in this industry and keep AFCA working at never before recorded complaints levels
Really get the advice ?? From your fund then run off and do it without looking into its long term or even short term effects for that matter
This just smells wrong and gives the industry funds and the unions yet another leg up
Jones shows that he simply has no idea. And that his objective is to lower standards so his industry find mates can provide advice more cheaply whilst also avoiding the ASIC tax.
Stephen Jones is a disaster for this industry.
It really depends on who you plan to call an adviser.
I could not be more pleased to see this abuse by 5 Liberal govts fail so publicly..
I know what it did to me and can only feel so sorry for the people who suffered poor healt.h StresS, other complications and financial failures, not of their own doing.
aNY ONE WHO LOOKS INTO THIS BUSINESS NOW ESPECIALLY WITH WHAT THE BIGGER PLANNING COMPANIES HAVE BEEN REPORTED AS PAYING IN FEES TO SUPORT THE GOVT DEPARTMENT, IT IS ONE BIG CRASH JG