There could be a period of up to 12 months during which new financial planners will not be authorised to give advice as a result of the regime likely to be put in place around the professional year inherent in the proposed Financial Adviser Standards and Ethics Authority (FASEA) regime.
Financial Planning Association chief executive, Dante De Gori told Money Management’s Future of Wealth Management Conference on the Gold Coast that while he expected a significant exodus of planners to be one result of the new FASEA regime, a pause in new planner authorisations was also a likely outcome.
De Gori said the regime would likely see no new planners authorised before 2020 due to a combination of the implementation of the regime around the minimum degree-level entry qualification, the adviser examination and the need to complete a professional year.
De Gori told the conference that he believed this would give rise to a pause in authorisations which would add to the disruption caused by the likely exits which would occur.
Association of Financial Advisers (AFA) general manager, Policy, Phil Anderson said he believed the imposition of the FASEA regime would lead to an exit on the part of financial planners, with as many as up to 20 per cent choosing to leave the industry.
He said that while, like the FPA, the AFA supported lifting the level of education and professionalism in the financial planning industry it was also important not to make the regime so unreasonable that it forced experienced planners to leave.
De Gori said much work needed to be done to ensure that degrees were appropriately recognised, rather than adopting a too-narrow, prescriptive approach.