The actions of the Financial Adviser Standards and Ethics Authority (FASEA) with respect to financial planner education pathways may have gone further than was intended by the Federal Government, according to the Association of Financial Advisers (AFA).
In a detailed submission in response to the FASEA guidelines, the AFA has urged that there be closer reference to the Explanatory Memorandum underpinning the legislation establishing the new FASEA regime, warning that as many as 8,000 are at risk of leaving the industry.
“With the implementation of any new regime, the law is critical, however there needs to be a level of reference to and reliance upon the Explanatory Memorandum,” it said. “The FASEA proposals do not address many of the important provisions discussed in the Explanatory Memorandum. It would appear that FASEA have gone further than the Parliament had expected as defined by the Explanatory Memorandum.”
The submission said AFA research had suggested an exit rate of between 16 per cent and 45 per cent even before the Royal Commission had begun its hearings, and that education standards for existing advisers represented a particularly challenging issue.
It said the AFA believed that the existing FASEA approach had not placed an adequate focus on obtaining the commitment of existing advisers.
“If we fail to gain the vast majority of existing advisers’ commitment to this journey, then we will have failed to achieve the core objectives for the Australian population,” the submission said.
“It is important to think of this as a huge cultural change program that will only succeed if we can win the hearts and minds of the financial adviser population,” it said. “In order to do that, we recommend that the objective to retain experienced advisers is recognised as a core objective of the overall program and that changes are made to specifically focus upon this and to directly address the issues that have emerged since the consultation effectively commenced with the 14 December 2017 release.”
The AFA said it believed the process had reached “a critical inflection point” and that the next six months would most likely determine success or failure.
“While we are sure that there has been a higher purpose of encouraging or indeed enthusing advisers to embrace further education, unfortunately, any potential overall sense of positivity for education amongst existing advisers has been largely lost at this stage as a result of the high level of confusion and anxiety that has developed over the last six months,” it said.
The AFA warned that important action needed to be taken to re-engage the adviser community.
Comments
Obviously the ones who have left because of the Royal Commission have got something to hide.
If those advisers who cannot or are unable to do the education in the interest of their clients, then the sooner they get out the better.
AFA should not be seeking to water down the provisions. Maybe AFA should close shop as well as it is clearly not interested in maintaining the reputation and value of financial planners who are committed to the profession.
What an enlighteningly misinformed comment. You fail to realise that Financial Planners are human beings, small business owners, employers and usually active people in their communities via networking and referral groups. Perhaps being continually stopped on the street and being tarred and feathered by the actions of the minority is taking its toll emotionally on these people, did you ever stop to think about that? Probably not, they don’t teach you much at Union School other than to extort do they! Grow up Hedware, feel free to find another forum to espouse your leftist agenda.
Out of the blocks quickly this morning Hedache!
If you have read the examples of many experienced advisers who already have degrees and who have already dedicated significant time to continuing education, designations and qualifications and who may yet will still have to commit countless hours and expense to further study, to flippantly just state they should get out without consideration to age, experience and prior education is typical of some of the righteous bigotry from some sectors.
Are you suggesting that a mass exodus of experienced and high quality advisers would be good thing for the profession and the consumer?
It seems you get quite excited about the idea of the proposed education standards representing a cleansing or scouring effect on the profession.....a bit like a dose of Draino !!!
You nailed it - pleased that you agree.
Have you tried Draino Hedache ?
If not, give it a go and let us know how you feel.
When you get down to only being able to make puerile and invective comments, you show that you have lost the argument. You can do and be better.
AFA recognises cultural change is required but they are confused if they think the objectives of the Australian population are the same as the objectives of advisers. If they think that by appeasing advisers they will achieve cultural change they are delusional.
It will be uncomfortable for many and a reasonable number of advisers will exit. That is what is required to reach a position where the objectives of the Australian population (competent, objective and conflict free advice) are achieved. Consultation will see the existing proposals moderated to deal with most of the examples Agent 86 alludes to, but they shouldn't be based on trying to keep 95% of advisers happy. That approach is why the advice industry is being called to task now (advisers before consumers).
Thanks Hardware...... I will strive for greater things...you are a source of inspiration and enlightenment.
I didn't realise that winning to you was everything at the expense of everything else, but now I see the light.
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