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.”
Comments
Nice distortion of the facts.
Due to incremental cost to an afsl of each adviser on the register afsl are removing advisers from the register and pushing them from the frontline.
This particularly includes those who have had to cut back from full time roles due to family and/or education pressures.
These “newer” advisers are the sacrificial lambs to the asic industry funding levy debacle.
Women in particular are being squeezed out, and/or suffering reduced earning capacity, due to the lack of regard for different forms of participation in the industry.
Of course they can all go off and do intra fund advice for a big fund and that’s not advice at all.
It's been interesting reading all the comments on licensing articles.
Whilst the number on the ASIC FAR certainly has gone down, and may go down further, the number of Advisers on the ASIC Professional Register (PR) - where all Advisers must be registered first - remains very high. If an Adviser is on the PR, and not the FAR, they are providing advice to wholesale clients only.
Dropping off the FAR just means cessation of licensing for advice to retail clients.
Don't forget there are two Registers for Adviser licensing - the PR and the FAR.
the oracle of Sydney has been saying the same thing. wholesale advisers will remain, they only need an AFSL, they don't need to give any disclosure documents that are required to protect retail consumers. they will be the only ones that will survive
Agreed that there were many people removed from FAR due to ASIC levy per adviser as they didn't really need to be there anyway (compliance, paraplanners, managers etc). Any person providing intra-fund advice however still needs to be on FAR as it's personal advice and has all the same legislation to comply with except the SIS Act provision that allows funds to collectively charge all members for certain limited scope advice that everyone calls intra-fund advice (this isn't a legislated term and there's a lot of confusion about what it entails). If you look at super funds' advisers on FAR you'll find they've got them registered. They have to meet all the same FASEA requirements too. Intra-fund advice is certainly no panacea but it's a valuable service to people who can't afford or don't want/need comprehensive advice at that point in their lives. Where my concern lies is that this collective charging legislation isn't clear on the extent of advice that can be included in it and many funds are pushing it beyond what I believe was intended by the legislators (eg starting an income stream).
You are correct to say that intra fund advice is personal. And yes there are some token super fund advisers on the FAR. But the majority of intra fund advice is being given by super fund sales reps and call centre staff as general advice. These people are not registered advisers, and are not subject to BID or the FASEA Code.
So what are you saying, experience trumps education?????
More misleading nonsense from FASEA. We all know a high proportion of exits are accountants with limited license. So that will lower the average. Why quote 30+ years experience to support their argument? Very few advisers start in their 20s. Even though 7% may sound small, how does this compare to the overall numbers? And what about those with 10 years or 20 years experience? If FASEA had a shred of decency they would publish all the stats so we can see what is going on. Sick of the lies and BS from this dishonest, self righteous, bloody minded, failed bureaucracy.
Obviously FASEA recruits its spin doctors from the same place as the Victorian Premier Dan Andrews. With the FAR register only coming into place in 2015 many advisers previously operating as a Representative of a CAR/AFSL had their designation changed to become a part of the FAR register at the time. If it takes 30 years to be an experienced adviser - why is that experience not recognised by FASEA. The industry doesnt need conflicted beuracrats to tell us that we are losing experienced advisers hand over fist as a result of FASEA and the ASIC levy.
Hopefully one day FASEA/Jane Hume will understand what they have done to the industry by keeping their heads in the sand. I agree with improved education requirements and more sensible scrutiny of the industry. I am now in my 40th year as a planner, haven't decided whether to continue or not. Surely the planners with "less than 10 years' experience" are the future of our industry. Just shows Shade Brockman/ FASEA do not have a plan for the future of our industry. What a shame!
So 40% had over 10 years experience. What was the breakdown of experience overall, not just those that have exited? If 20% of the workforce was represented by 10+ years experience, and 40% of exits was represented by this group, it would actually tell us there's a higher proportion of experienced advisers leaving. Way to twist the stats to support your case
What a LOAD OF CRAP!!!!!!!!!!!!!!
I have over 20 years experience as a self employed adviser and 8 years as an employed adviser, with a business degree from 1992 and 1 post graduate degree with the old SIA in applied finance and another post grad with the SIA in Financial planning and been a CFP for 20 years. Yet i still need to do the FASEA exam and my degree was not recognised from UTS, no degrees from UTS were recognised. Yet, i was still not good enough for AMP to keep so I was terminated despite being female and professional and compliant and ran a successful practice with 4 staff.
So you tell me FASEA am i qualified or not experienced enough....i am not sitting the exam because of what you allege but because of what you and the rest of the industry and greedy corporations have done to me and my business. You have ruined a respective industry due to a few bad apples. Shame on you and everyone else that is on the gravy train.
people keep referring to bad apples in the industry. it is impossible not to have bad apples in society that's why we have prisons, and in general, every profession has bad apples.
dwell on this data. the most recent published data from AFCA said they had 1,500 complaints about financial planners. the Australian medical association gets 10,000 complaints pa. what bad apples are you talking about? doctors are gods aren't they how come they get 500% more complaints then.
this is a myth spun by vested interests to blame advisers. everyone needs a scapegoat, so they find an underresourced person like an adviser to blame and the show goes on.
but luckily advisers have had enough so the exodus continues.
I started in financial planning at 22 as a financial planning degree graduate. With 15 years experience i left the industry last year. I am not the only one in this category. The community will lose a generation of experience with no one coming through. The numbers studying FP degrees are tiny and only a fraction want to be an Adviser towards the end, and they are all struggling with finding graduate roles/PY. I know because i teach them. Soon, the Uni's will stop offerring FP degrees because it is not economical. The only pathway will be career changers completing online Grad Dips. A mature career changer will still struggle finding PY placements. This whole thing has been a mess. In the eyes of the government and regulators, the solution is 'single issues digital investment related advice'. They have completely given up on human advisers, given up on comprehensive advice. If that was the solution, where are all the digital lawyers? Digital dentists? Madness!
you have explained it well, single-digit supply into the industry and mass exodus of experienced advisers, no Digi advice solution yet. that leaves thousands upon thousands of clients orphaned, and potentially into the arms of criminals.
a good solution isn't it.
By end of this month, I will be gone, along with my forty-plus years of experience and having passed the FASEA exam. Earlier exit than I expected, but my health won't cope with another four years of meaningless red tape that adds nothing but costs to the client experience.
I don’t believe anything that gets printed these days
My own observations and conversations with my peers are enough to tell me the true mess this is and the feelings of the majority of advisers
There frustration and anger at not one action being undertaken to assist them or listen to the questions being asked
I am hoping to pass the FASEA exam I sat in May but until they get of their arses and realise it does not take 6 weeks to mark an exam I will sit here frustrated annoyed and in doubt about my future post 2022 I have a huge debt to pay back after buying my partner out and cannot afford to fail
But km sure Fasea know of not just my plight but hundreds like me and will lobby Macquarie bank to waive my debt ????? And all this after 43 years in the industry
What a joke this is Unfortunately it’s anything but funny !!
Before anyone can have 20 years experience in anything they must have first had 10 years experience. Losing advisers with 10 years experience is no less of a loss, it's just a delayed problem. Typical of FARSEA not to thinking about the future impact.
why does it matter to Jane hume what happens to our industry. why does it matter to Glenfield from fasea or others. they just come, get paid and leave, it doesn't matter to them they could care less.
they leave us with the tatters to deal with. but I think advisers have spoken, and they have said it quite clearly that no more. enough. c'est la vie.
How does FASEA know how much experience advisers have? The only data I'm aware of on public record is how long they have been registered as advisers. But lots of experienced accountants only became registered recently after the SMSF licensing exemption was removed. And many of those same accountants are now leaving. I suspect this statistical anomaly is the real driver underlying FASEA's claim.
Financial advice training and regulation is very corrupted in Australia. What a surprise
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