The number of advisers doing their professional year (PY) in the industry is currently not enough to sustain the loss of adviser numbers, as adviser exits outnumber entrants more than 10 to one.
In the Financial Adviser Standards and Ethics Authority’s (FASEA’s) opening statement to the Senate Estimates Economics Legislation Committee, it was mentioned that “close” to 200 new entrants were doing their PY.
However, the latest data from HFS Consulting in October showed the net loss of adviser roles on the Financial Adviser Register (FAR) was 2,433 so far this year.
The PY requirements commenced from 1 January, 2019, as a requirement of the Corporations Act 2001 and was a requirement to becoming a qualified financial adviser.
It comprised a year of full-time equivalent work of 1,600 hours, which included 100 hours of structured training.
Keith Cullen, Wealth Today managing director, said they had one new PY member but it was an existing staff member.
“It’s an existing staff member that’s been with one of our adviser’s practices for a few years,” Cullen said.
“We’ve probably had a dozen advisers exist the industry ourselves over the last 12 months that were either people semi-retired that have decided it was too hard or they had a small practice that was an adjunct to an account or mortgage practice and decided it was too hard.”
However, Cullen said the current exodus may not necessarily be an issue as a fewer number of advisers could be enough for the industry.
“Let’s say the appropriate number of advisers for Australia is 12,000 to 15,000, not the 20,000 plus that it got to… the natural course is that you’re going to need 1,500 [new entrants] a year,” Cullen said.
According to FASEA’s opening statement, almost 50% of advisers had passed the exam, which equated to approximately 10,000 advisers.
There were also six exams to be held in 2021, as well as the results pending from the October and November exams.
The average number of advisers who sat each exam was around 1,600, with an average pass rate of 84%, which meant another 10,000 could pass based on the current trends before the 2022 deadline.
Comments
But wait just ask FARSEA, it’s all going so well.
Everyone but FARSEA is unanimous that the Standards and guides are not workable in the real world, especially 3,5 and 6.
Bugger all new entrants to replace the massive losses, going great says FARSEA.
FARSEA’s boards conflicts of interest disclosures - as if we would disclose those as it will prove how Unethical, biased and conflicted they are.
As a current PY I wonder how many have completed, there is no way it can be completed in a year. You can't apply for the FASEA exam before quarter 2 is finished and Quarter 3 starts when you've passed, that's about 3 months in limbo. Then there's the ethics course as well. I'd say 18 months if you pass FASEA 1st go and about an extra $3,500 of costs. To be honest many will think its too hard for the current reward.
Out of the 200 PY entrants, how many won't make it through and how many will realise that financial planning is now the most over regulated, over controlled, over complianced and risky occupations you could ever be a part of.
On top of that, they need to also realise they are risking their mental health and well being if they decide to pursue a career in the current toxic environment.
If, out of the "close to 200" 50 decide its not for them this then increases the massive inequity of advisers and consumers.
If even 150 get through each year, Cullen is suggesting it will require 10 times that many each year.
It is not only the total loss of adviser numbers but it is the loss of experience and knowledge to the industry that must be factored in to the total impact.
You simply cannot lose decades of industry experience and knowledge and then just say that there is some new blood coming through that will replace them....it doesn't happen that way.
Whilst some ignorant commentators will simply say that it's only getting rid of the dead wood...guess what.......
you cant light a fire with just green wood.
There is value in experience that can't be easily measured, but as this has been a deliberate culling exercise,
that value is a significant loss for many years to come.
There has been a persistent and determined deconstruction and dismantling program in play over the last 5-7 years and it is being driven by the left wing ideology of CHOICE, CALC, FASEA ,ASIC and academics that philosphise, speculate and theorize about morals,ethics and conflicts, but have no experience or real knowledge of the reality.
This 'experiment' has and will continue to be a failure and will have a detrimental impact on the Australian consumer.
Yep, there is a core group of political activists who have hijacked CHOICE, CALC, FASEA, & ASIC who are abusing their positions to impose their extremist ideologies. They neither understand, nor care, about the real needs of the majority of consumers.
Add me to the leavers next month. Im going to pursue a career with better pay and conditions i.e cleaner.
The whole picture is not being taken into consideration here ! So many advisers i talk to are only doing the FASEA exam to give them more time to gracefully and more profitably leave the industry. Particurley older advisers 50 and over.
It not now you will see the major exodus its December 2015 when all those that have chosen not to complete " the never ending degree" walk out.
At present the numbers coming in are not all guaranteed to complete their initial year let alone spend thousands on further education that they may never need as is the system at present.
I for one and my partner are in this very position after 43 years in the industry not one "red mark" on my resume i am suppose to return to school.
Not ;likely
Sorry its just become way to hard and confusing.
Gee Ken, 43 years in the industry and still not retired? I'm not sure anyone should be going to you for advice on anything, ever.
I guess that was the most positive contribution you could muster. I guess it all comes down to how much money you have in the bank is the measure of your own success, and how much money in the bank someone else has is a measure of their greed and corruption. You'll be still stuck in the schoolyard by the time you are Ken's age bigshot, blaming someone else for your failings.
Interestingly, you have no idea that Ken may be only 61 (if he started at 18), or 63 if he started when he was 20 years of age.
Is 61 or 63 years of age too old to be providing experienced, quality financial advice....it appears to be in your world.
Give us your current age and lets see if we can come up with a few uniformed, stereotypical opinions.
If you are under age 30, then maybe you are are just an obnoxious, immature , know all GenY or GenX who believes they already know enough or more than they could ever be taught or if you are over 40, then you should know better.
Take care "Anonymous" ....and lets hope you stay that way.
Ken, your comment is so disrespectful. I have been a self employed financial planner for almost 40 years. I have no intention to retire and it clearly is not for economic reasons. Your negative attitude towards long standing financial planners is not a healthy one. I cannot make assumptions about because I do not know your age, time in the industry, your tertiary qualifications or your employment status. A good financial planner would research their material before making such comments. Anybody who has been around for over 40 years, not only has self respect but the respect of his clients as well.It is unfortunate that some advisers are not as academic are being driven out of the industry.
If you wish to continue that is fine and I respect that Whst I don’t know though is how you have come up with it being disrespectful
I am referring to the” Never ending degree”that is being perpectuated by FASEA and ASIC on people who either do not require the in depth study being forced on them anc have become disgruntled by no one listening to their pleas
Economic position is irrelevant in deciding you have had enough of being kicked from pillar to post
I trust you are successful at your education
I trust for your sake it all finishes by the 1st of January 2026 which if this track record remains as is will be highly unlikely a long involved and expensive education “ the never ending degree!
I think Anton above needs to read the comments better. i think he has the reply to your comment Ken, mixed up with your name as his response is appropriate to that comment but not yours. I feel your pain, I have over 30 years experience in the business and am pretty successful financially by anyone's standards but the ongoing price to the quality of my health has definitely become an issue.
You cant let the actual numbers and what advisers are telling you will happen get in the way of what the "experts" are telling you. Ask FASEA, Ask Trump
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