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.”
Comments
The number of clients lost due to bad regulation will be far greater than the number of advisers lost due to FASEA. Most practices are focused on how to reduce staff in line with a smaller client base and lower revenues. Adviser recruitment is the least of their concerns.
Yeh sure BT clown, all businesses needing new Advisers can pick from the pool of 6 new Advisers that have gone through the professional year.
You are a drop kick.
How about focussing on BT / Asgard fixing their abysmal FDS Optin processes rather than write stupid articles.
Groundbreaking. Of course they need to start looking at how they can continue to service their existing client books. With so little new entrants into the industry (I mean, who would) though, they have a choice to, take on someone that hasn't passed the exam and/or education requirements, take on someone with a bad record or coming off a bad situation, putting someone through a time demanding PY "structure" (I use the term loosely because the promised assistance from FASEA is non-existent), try to compete with other businesses with higher salaries or drive their current advice group into the ground with additional workload.
In an industry where costs to run a business have expanded exponentially due to poor regulation and red tape, the choice many make is to pile more work on existing staff. Hence the burnout - which would exist under normal circumstances over time anyway.
Recruit who? I can only speak for our market in regional QLD but there are no candidates now forget 2022. We and many of the professional practices we network with have surging demand and strong revenue growth but cannot find diligent professional advisers to recruit. I won't go into the reasons for this as they are well known to all of us but perhaps a little less negativity and a little more optimism about the very bright future for financial planners would help make the profession more attractive to professionals with career choices. The compliance pendulum will swing back in time as we move to individual licensing, the ALRC drives a complete rewrite of the Corps Act, and hopefully also the abolition of licensees. It may sadly take another 3-4 years for all that to happen but the wheels are in motion and a consensus seems to be emerging.
Spot on Richard.
1. No candidates available / worth recruiting
2. Compliance pendulum will swing back to the middle
3. Individual licensing
Those who remain will be in a very sweet spot indeed
Bang on Richard. It’s not just regional - we are based in SEQ and find it hard to recruit decent staff. We had an entry level associate come through the door, under 30 with just over 2 years planning experience wanted $120-$150k. I’m led to believe the candidate is still looking…
Hence my post on an earlier article about us acquiring businesses and merging in fees. It’s costly and sticks out like a sore thumb on the balance sheet but it’s cash flow accretive at present, gets you good staff and business owners. Interest rate hikes might pump the brakes on it though! All the best for you and yours in Regional Qld - it’s a spectacular place full of great folk.
Thanks Felix and best wishes to you as well. Acquisition where staff are part of the deal has much merit. It also builds scale and I strongly believe the practice of the future will need scale. We are going along the same lines as the GP industry over the last 20-30 years where the corner GP has largely gone replaced by the multi discipline medical centre - most with 10 or more GPs supported by a professional and economic back office. Thanks for contributing to a positive profession and there has been way to much negativity and pessimism the last few years.
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