Advice practices that have advisers who are not going to sit the Financial Standards and Ethics Authority (FASEA) exam need to start recruiting, according to BT Financial Group.
BT’s head of financial literacy and advocacy, Bryan Ashenden, said practices that had advisers who did not intend to sit the exam or if there was a concern they would not pass the exam this year and could not sit the exam extension next year, would need to start thinking about what this would mean for clients.
“Recruiting is something you can’t do last minute and practices need to start thinking about who they were going to hire. There also needs to be a hand over process over the next six months for advisers who know they will not be giving advice next year,” he said.
“The practice would then need to introduce the new adviser to clients while the former adviser was still there and let the client understand what is happening and get used to the new adviser.”
Ashenden warned there would be a shortage of advisers to fill the gap and practices also needed to think about how to attract advisers. He said while there might be some advisers willing to change licensees, practices with advisers who passed the FASEA exam would want to make sure they stayed.
“If an adviser leaves for another practice then recruitment is needed and you don’t want that domino effect to take over and that is important. Practices also need to think about what extra support they can provide to give advisers so that they can get through the exam,” he said.
Ashenden noted that not passing or taking the exam would mean they could not provide personal advice but that they did not have to exit the industry.
“They can still be a business owner, they can still own a practice, and they can still do a lot of client relationship side of things such as maintaining relationships with existing clients and source new clients,” he said.
“They just can’t provide advice or be a supervisor for somebody undertaking their professional year.
“We don’t have to lose them to the industry. There’s a lot of great experience that sit with these people in this potential position and there’s definitely other roles that advisers in this position can fulfill. They just can’t give personal advice.”