Adviser departures hit triple figures

The advice industry is down 132 advisers this week dominated by the effective closure of 47 small self-licensed Australian financial service licensees (AFSLs), according to Wealth Data.

This compared to a net loss of 31 advisers in the previous week.

Wealth Data’s Colin Williams said it appeared the Australian Securities and Investments Commission (ASIC) had been catching up with licensees that had not been removing advisers due to them failing the financial adviser exam.

Related News:

“With regards to the FASEA exam, the AFSL was required to remove advisers who had not passed the exam and not eligible to have another go through to September,” he said.

“It is obvious that this was not done by many small AFSLs and it is only now being chased down by ASIC.”

It was a slow week for growth with only 15 licensee owners managing to grow in size for a total of 24 advisers. On a positive note, seven of these were provisional advisers.

Three licensee owners each had a net growth of three, including Michael Ibbotson (Security National Financial Services) with two advisers coming from Count.

In losses, 47 licensee closed accounting for some 64 advisers, few of which had switched elsewhere.

State One Holdings was down -10 leaving one adviser at the licensee. This firm provided mostly ‘general advice’ for stockbroking. Interfinancial Corporate Finance closed for the loss of four advisers with Picture Wealth also down (-4).

Marsh Mercer fell to zero advisers after losing three. A total of 22 licensees were down two including Capstone, Industry Super, with this week’s data showing a very long tail of 90 licensee owners down one.

Four losses were backdated to last year, taking the losses for 2021 to -3,453 or -16.23%, the highest percentage loss since the Financial Advisers Register (FAR) was introduced in 2015.

Year to date, 121 licensees had closed and 231 had closed for the current financial year.




Recommended for you

Author

Comments

Comments

C'mon ASIC you can do it, only 17,000 more to go

If these small AFSLs can't keep their AR registers up to date, what else are they not doing correctly? Tick tick tick...

Who knows Mr lowest common denominator ....given it's a 2 hour wait to call a Covid infested ASIC with three different websites, I suspect you can't really blame them. They were probably busy looking after a few orphan clients so being a little late you could pardon them.

Lowest common denominator? That's how the law works Old Bob. Always has, always will.

Sorry, I should have said, Mr Dealer Group BDM. I know with advisers leaving and the better option of being self-licensed, and consolidating in licensee space it's causing a lot of redundancies and stress for licensee staff. Would certainly be worried working within a 20 plus licensee now. talk about tik tik ...loss of job. Don't think however slagging off small licensee's is the way to go however.

Old Bob, you couldn't further from the truth. I'm a business owner and adviser with 9 AR's. Never been a BDM, nor worked in corporate. As for you suggesting Im slagging off, grow up. I'm sick of us all working under same laws but applied differently depending on size. As for small licensees, watch this space. As adviser numbers have shrunk from 28,500 to 16,000 ASIC haven't gotten any smaller. They need to stay busy and already re-focusing on mid tiers, small tiers. Lets see what the Quality of Advice and ALRC reviews unearth.

In regards to your "im sick of us working under the same laws but different standards comments" So just why haven't you become self-licensed? ..it's cheaper, you get so much more compliance support these days, .oh you don't want to take on the personal risk...that's right...so when I do something wrong, as a self-licensed Adviser, I never ever again can work in the Financial Services industry, my business, my family home is on the line.... but you... you simply walk up the road and get a new job. There are no laws depending on size, we all follow the same laws, in fact ASIC started with 20 small licenses to review FDS statements. I can give you 50 examples of Advisers getting banned from Westpac on Friday and working at CBA on Monday and you've made a decision to be in that space. So why make a ridiculous comment implying self licensed advisers don't take laws seriously because that is just wrong. If anything the exact opposite is the case because our necks are on the line, you literally have no skin in the game.

Good for you Old Bob. You run your business your way and I will run mine my way. Licensing is currently a necessary requirement to provide financial advice in Australia. The regulator needs to apply the laws evenly to all advisers, across all licensees and ensure reference checking is done prior to authorising AR's when people move.

The current licensing model is broken. The solution is simple, direct, licensing of all advisers.

The solution is definitely not the mid-large licensee model, where regulatory processes are effectively outsourced to conflicted product companies, who exploit that role to drive product sales from advisers under their control. That model has been the source of most of the problems in financial advice.

This is an unmitigated disaster.
Please do not try and place any future positive spin on a minor increase in 2-3 advisers in a week when there are over 100 leaving.
The disgraceful mismanagement of financial services regulation over the last decade has rendered this industry a complete mess.
The human impact has been immense.
The negative impact on the Australian consumer and their financial future and their financial protection had been immense.
This is an organised, discriminatory dismantling of an industry and a targeted attack on individuals and small business.
There has been a very unhealthy obsession against financial services providers from a range of misguided interest groups along with a Govt that has no interest in the well being of those individuals, their businesses & staff or the many hundreds of thousands of clients that will be left behind without the guidance, relationship and trust they have been provided by their dedicated and loyal adviser.
It is an absolute disgrace.

But no one gives a stuff. You are on your own.

Clearly, as a result of the pandemic and offices being closed in Victoria and elsewhere for so much of the last two years, advisers have needed a lot more time to prepare for and sit the Financial Advisers Exam yet neither the Federal Government nor ASIC have made any allowance whatsoever for this and seem happy for well-qualified and experienced advisers to exit the industry or to switch to advising wholesale clients only. Small mum and dad retail investors will pay the price, and they will pay a big price, and Morrison and Frydenberg will be to blame, as an increasing number of mum and dad investors turn to online brokers like they have been doing invest in companies like ZIP and currencies like BITCOIN. Advice for them will not be affordable assuming they can even find an adviser prepared to take them on as a client. In the meantime, ASIC freely gives out its own flawed investment and taxation advice on its Smart Money website. One of the questions on the exam should be to critique the information on the Smart Money website and to give reasons as to why ASIC is providing this advice when it says right at the outset that it is not licensed to provide advice.

Not made any allowance?!?

The exam deadline has been extended twice. The extension to the extension added nearly two years to the original deadline. Competent financial planners passed the exam before COVID was even heard of.

Whether these are real planners exiting, or just people with an AR handing it back, this is about the AFSL abiding by the legislation in a timely manner. The article points out the reason for the drop is because AFSL's haven't done their job properly. These AR's should have already been removed from the FAR. Putting your hand up to run an AFSL without taking your responsibilities seriously is the issue here. Stop whinging about what ASIC is doing and just do the right thing as a licensee. Remember standard 12.

Josh Freedenberg and the Liberal Party of Australia will be overjoyed by the closure of more financial advice businesses. So too will their Big Bank donors.

How hard is it to become a bus driver?

I've voted.

At the height of the flawed LIF negotiations, I had the experience of talking personally with Josh Frydenberg for approx 20mins one on one.
I had a Liberal Party contact who had passed my mobile no: on to Frydenberg.
Then, one evening I had a call directly from him asking why I was so very concerned in relation to the way things were playing out and the potential adverse consequences to advisers, their clients and the future of risk insurance advice that would result if the proposed framework were to proceed.
I gave it everything I could because I knew it would be the one and only chance to be one on one.
Frydenberg's attitude was appalling at best and despite the detail I was across after 30 years of advising that I could cram into 20mins, I was left in no uncertain position that Josh Frydenberg had no interest whatsoever to the massive impact on small business.
Frydenberg is not one for empathy at all when it comes to financial services providers.
We have never had, nor will we ever have a friend in him if he remains in power.

I wonder if he'll reflect on that phone call now... I hope so, because it's clear that the Libs have abandoned their traditional constituents and they're now paying the price.

I suspect the phone call never happened. Or if it did, old lifey made it worse for everyone.

The phone call happened.
Josh Frydenberg called me from Canberra around 7pm.
He had approx 20 mins between meetings and made the call based on a recommendation from a fellow Liberal MP.
If you are Martin Codina ["Anonymous"] then thanks for nothing.
PS. Whilst I am definitely not an " old lifey" as you refer, I have known many over the years who have delivered the most meaningful and appropriate advice,guidance and assistance to so many valued clients and possessed a level of integrity and commitment to their clients that only the vast majority of politicians could ever dream about.

Still not sold it actually happened. Maybe in your mind. It might be a good story for the magazine if you were willing to go on the record and provide phone records, corroborated by others involved, etc. Until then, I doubt it. Most will.

Thank goodness Albo is PM. He will save the 'profession." Making advice affordable again. Thanks comrades, I'll let myself out now...

Frydenberg is no loss but don't think life will be any better with Jones and these air head "independents" ( HAC puppets)

Definitely an unmitigated disaster. It's absolutely clear...

1. MIA Jane must go...
2. Frydenberg must go..

Hey wait, I think I'm too late on that LMAO.

I wonder if labor will dismantle ASIC for us?

Jane's still in the Senate, Labour may increase ASIC spending (they love increasing the number of public servants), increased compliance on industry participates?

ASIC likely to be rezoned to be run out of China, with oversight by the unions.

Add new comment