The Financial Adviser Standards and Ethics Authority (FASEA) chief executive, Stephen Glenfield, has responded to strong questioning during Senate Estimates about the likely outflow of financial advisers from the industry by reinforcing that the authority is simply implementing legislation as it is required to do.
Queensland Liberal Senator, Amanda Stoker, directly challenged Glenfield on whether FASEA “acknowledged the risk of losing an awful lot of experienced financial advisers for whom doing a full eight-subject graduate diploma late in their careers is just too much, too expensive and, quite frankly, too disrespectful to the role they play in the culture of the profession?”
Glenfield said that FASEA’s was implementing legislation that came from the Parliament and that the authority did not go beyond that.
Senator Stoker also noted that the number of advisers on the Financial Advisers Register had decreased from nearly 29,000 at the start of this year to around 25,500 as at the beginning of October.
“I would suggest this is a significant drop that we can expect to see continue to decline over the next year or so as an unreasonable approach to valuing [continuing professional development] CPD and industry experience kicks in,” she said.
“Tell me,” she asked Glenfield. “Is it not the case that the profession is losing around 6.4 per cent of financial advisers a quarter?”
Glenfield said he did not have those particular figures and acknowledged that he also did not have data on how many new advisers had joined the profession this year.
In asking her question, Senator Stoker provided what she described as case studies by way of example.
“You said that there's no prejudice to older members of the profession by the requirements FASEA's imposing. I'll give you the example of three advisers, each of which have more than 30 years of experience in the profession, who have been leading it, teaching others, mentoring others as they come through to be wise and fair and working in the interests of customers,” she said.
“Paul Franklin is 72 and he wants to continue to practice for another eight years. He's been told he needs to do a full eight-unit diploma to continue. James Forde is 64. He would be required to do the full eight-subject graduate diploma. And Wayne Leggett is 64, has a bachelor's degree and an eight-subject diploma of financial planning and would need to do five subjects. All have over 30 years’ experience in the profession. Can I suggest that the approach that is being adopted by FASEA is not sufficiently recognising the service, experience and prior learning of people who are at the upper end of the profession?”
Glenfield responded: “I would only respond that the legislation requires, as part of the lifting of the standards that it was aiming to achieve, that advisers reach a bachelor or higher level of education”.