The lot of financial advisers and those looking to become financial advisers has been made even harder and costlier by the Federal Government’s moves to increase the price of some university degrees, with Commerce degrees increasing in cost by 28%.
The Association of Financial Advisers (AFA) raised this issue when giving evidence to the House of Representatives Standing Committee on economics and this was driven home by AFA policy and professionalism director, Phil Anderson, who said the increased cost was an unfair impost on advisers who were already under pressure.
He said that, what is more, the higher cost would make it even more difficult to address the growing exodus of advisers from the industry.
The AFA told the Parliamentary Committee that the number of financial advisers on the Financial Adviser Register had fallen by 6,000 in the last 18 months.
For its part, the Financial Planning Association (FPA) said that there had been just 51 new graduates entering the industry at the same time.
“There is a lack of new advisers, to replace those who are leaving, and the recently announced increase in university fees for Commerce-related degrees will further impact this problem,” the AFA said.
Anderson said the industry was facing an incredible shortage of advisers, and that relief would be sought from the Government with respect to the cost of adviser-related degrees.
Comments
Typically the AFA use the inflated figures. We all know there was an influx of "advisers" scrambling to get on the register who weren't even giving advice at the time but met the minimum standards. Many of them have now dropped off but not necessarily are out of the industry. No-one has any real clear and clean data on this despite their best efforts.
There is no shortage of advisers. There is a shortage of clients willing to pay the high costs of advice, caused by over complicated regulation. Even if adviser numbers come down to 10,000 that will still be more than enough for the market size.
More and more consumers will get their financial advice from advertising and PR moving forward. And they will get poor outcomes as a result.
I agree 100%. It seems the general public is used to the "free advice" provided by their super funds as well as online in forums, etc. There are very few members of the public are willing to pay anywhere close to the true cost of financial advice.
It appears to be very difficult to onboard new clients who are prepared to pay for professional financial advice. I could be wrong but I suspect that the reason advisers are leaving this industry in droves is that the general public is not buying into the value of advice and very few are willing to pay the advice fee.
You are dealing with a government that has in its sights an agenda to achieve. This allows for only a few players such as industry funds, who continue to operate in their own world with exemptions granted and gifts for ministers who will back the needs of the ISN as well as banks and the odd life insurer. All others do not matter. The cost of advice will increase and be made affordable to a very few. This allows the vast majority to be caught in the designs of the needs of these instituions and profists before people to continue. This is despite the damning findings of the Royal Commission.
Adviser associations have let advisers down for many many years and are now found wanting. An association needs to act for the members. But both the AFA and FPA have received partner fees from these very instiutions that have caused the greatest harm to consumers let alone advisers. FASEA is an example of intent. They are not transparent, not trustworthy, honest or fair. Oh wait, thats right, they don't abide by their own ethical charter. Why not?
Education costs increase you say. How did this come about. Oh thats right, banning students entering university from far of lands. No thought, just more nonsense now coming back to bite an industry and an economy. Uncaring and stupid is this current government. Hey at least we will have more missiles though....
Phil Anderson hits the nail on the head (again). Another cost increase on top of other multiple cost increase may be the final nail in the coffin for some. The Government seems intent on regulating financial advice out of existence, or rather ensuring it is only available to the wealthy few.
kinda too late phil and fpa and all other leeches surviving on the crumbs of financial planners.
we are leaving in droves, there won't be anybody left to blame in a few years and then you can figure out why
in the meantime, I hope you have a trade or skill, the market is brutal, you have to offer something of VALUE to someone else to earn a buck
until now it has been an easy ride on the back of financial planners
wishing you good luck, wishing you da good luck, you are gonna need it
The 28% increase in the cost of commerce related degrees, which will include all financial planning degrees, only applies to new undergraduate students from 2021. This does not directly impact existing financial advisers who have either already started their study or are doing postgraduate study, however, it will certainly impact the flow of new advisers into the financial advice sector.
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