High number of advisers who passed FASEA exam do not practice

Recent data has found that of 9,995 advisers who passed the Financial Adviser Standards and Ethics authority (FASEA) exam there were 699 who were classed as ‘ceased’ on the Australian Securities and Investments Commission (ASIC) Financial Adviser Register.

The data looked at the numbers of advisers who have passed the exam and had given permission to be on the list.

Colin Williams, director at consultancy analysing adviser movements Wealth Data (formerly known as HFS Consulting), said if that number was to be grossed up to account for those advisers who have passed the FASEA exam but did not disclose their pass, it would go up to 946.

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Also, according to the data, of the 699 identified as having passed the FASEA exam, but currently ceased, 621 left the industry after Jan 1, 2019, and there was a total of 784 resignations for this group of 621, highlighting that some lost their role more than once.

“Not all appear to be without a ‘job’,” Williams said.

“A small number work in advice support roles and have been released from the FAR. We have seen this occur a number of times as licensees cut back on the number of non-client facing advisers listed on the FAR.

“The median years experience for the group is 11 years and 495 had left the Financial Planning peer group. One would expect that many will be keen to get back into advice. This could cushion the overall forecasted loss of advisers.”

Williams said of the 13,500 advisers who passed the exam to date (post the March 2021 sittings), according to the FASEA’s published data, 9,995 passes were matched by Wealth Data against advisers and licensees on the FAR listing. This excluded timeshare and the majority of foreign exchange advisers.

To extend the forecast to year end, Wealth Data reviewed the current number of advisers expected to sit the May sitting – at 1,850 and estimated the number of advisers who would re-sit the exams by year end.

“To form the table below, we have ‘grossed up’ pass rates by 1.35 to make up for the advisers who have passed but not disclosed their pass on the FASEA Listing,” Williams said.

“Our estimate of remaining passes is a bit optimistic, but we feel there is now a concerted effort by all stakeholders including licensees, to help the remaining advisers to pass the exam. Using this 2,554 as a ‘pool’ of remaining advisers, we have shared this equally by the current pass rates at peer group and licensees levels to get to our final figures.

“To put this this into perspective, we have 9,293 actual adviser passes (showing as 9,493 roles in the chart) and the final number of actual advisers is forecasted to be 14,955.”

Source: Wealth Data


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FASEA would know this, yet they continue to quote figures which include these exam participants who no longer or never did practice, in an effort to hide the damage they have caused. Another example in a very long list of misleading and unethical behaviours from that rotten organisation.

There are a number of former advice staff who act in non-advice support roles, such as in Audit and managing advisers. Note that "supervisors" are required to have been on the FAR for at least 2 years, so this is relevant. Further, many of these advisers have been "forced" off the FAR as the licensees have determined that it is simply too costly to keep these staff on the FAR in light of the significant (160%) increase in the ASIC Supervisory Levy over the last 3 years.

This sounds about right as a final number. Some FASEA passes will never practice as an adviser again. What I find interesting is only the small uplift in 'non FAR' updating. If you're not in an adviser role how are you getting the FAR updated with your FASEA exam result?

I am the only one on record. no one else has made this bold prediction. it has only been me, the only one who is going to get this right so read it carefully. as you are all about to witness the oracle of Sydney make this prediction which will come true. and it is truly like watching a massive car crash in slow motion.

the vast majority of fasea passers (including myself) are looking to exit. these fasea passers already hold degrees that is required by 2026 and are looking for a suitable alternative to exit because it is virtually impossible to provide advice.

it is virtually impossible to provide advice in the context of it being :

a. efficient, fair, honest, cannot do 2 out of 3, because the dealer group structure makes it inefficient, fairly: well you wouldn't be able to meet the fasea standard 7 last para which reads, it must represent value for money, a reasonable person on the street has already told us that they want to pay $300 to $500 for advice, how would you expect to meet a reasonable person test about "value for money" or "fair and reasonable" when their expectation is at $500 and the cost to provide advice is $3,000 and increasing

b. if it is not fair, can it be sufficiently honest, if it is not fair or honest can you meet std 2?

c. Joe Longo thinks he can change things, he won't his predecessor Georgy medcraft also said the same thing. remember the buffoon he ushered in to change financial advice, I'll give you a hint, C.P.A.

as I have said again and again there will be no more than 5,000 advisers by 2026 and they will already be very well established and service HNW only. 3,000 IFA's and probably 2,000 at IOOF and AMP. the rest won't survive.

we are already down to 15,000 with about another 4 to 5,000 limited license holders, i.e. accountants who will just give it up either at the end of the year or when the next ASIC levy increases by 160%.

there are probably another 5,000 or so mature practice principals who have passed the fasea exam and are waiting until 2026 to get out. remember also the stock brokers and timeshare people.

if this isn't a bungle or a big blow-up of an entire sector by total incompetence and mismanagement I don't know what is. we are going through a 1 in a 100-year pandemic with no light at the tunnel and this is the government's response.

the irony in all this is that the dealer group heads think they will survive, they won't because each of them needs to have about 400 to 450 advisers to survive, many just won't get to that number.

and the AFA and FPA, won't survive because they need about 15,000 members to survive, because only a % of advisers on the FAR are members of the FPA or AFA, if there is no tpb requirement and you have passed the fasea exam and met the education standard why would you pay an additional subscription fee to be a member when your costs are already through the roof. what's the competitive advantage of a designation when the whole market by 2026 will have either a bcom fin plan, gd dip fin plan or m.fin plan.

lots of people with their heads in the sand. unwilling to accept the reality that is forthcoming.

Very bold predictions their anonymous. Never heard any of this before. I feel so much more enlightened now.

In many of the pacific islands surrounding Australia, the islanders practice a special form of curse magic. If a tree needs to be cut down and it is too big to be chopped down, it is brought down by the combined efforts of the Islanders cursing negatively and yelling at the tree. This negative energy somehow damages the tree’s life energy the result being after about 30 days of getting cursed the tree dies off and falls to the ground!

the financial advice industry - and many participants within it who are honest and hardworking and reliable - have been cursed to death by the regulator, government, media, and the public that we are dying. and the manifestation is in the 52% reduction in adviser numbers already and 24 suicides.

that's the final comment from the oracle.

Maybe it was just a cyclone that knocked down the tree!

This suggests that approximately 5,000 more advisers will be gone by the end of the year with the total losses in the last 3 years being 13,500 (47%). Getting close to the same number of job destroyed when they shut down the car manufacturing industry.

except that Australians can import cheap cars from elsewhere. who is going to advise on a $3 trn super? during 1 in a 100 pandemic, and we are about to see the greatest wealth transfer in a generation from retiring baby boomers.

digital advice? do you know what has happened to the last few Digi advice solutions? they left because they said the comprehensive nature of the advice that is required under the law is not possible.

what has Jane Hume's response been ? "no one has cracked it yet"

it's higher than that. the long term average number of registered advisers has been around 28,500 so a decrease down to 13,500 is a loss of 15,000 or 52%

big drop-off coming on 1 Jan 2022. big drop-off coming on 1 Jan 2026.

if you are working for a dealer group, in any capacity, or if you are a dealer group head. it is highly unlikely you will survive unless you already have 400 to 450 advisers. YOU ARE GONSKI. simples as the annoying tv meerkat says.

so the people who are working for dealer groups better start packing up and having a plan b, or c. remember it's easy when you are being fed by us when we are gone, and you have to go to the market to get a job, you have to have a marketable skill that is you have to be able to demonstrate some sort of value to a new potential employer to get paid.

many of you have no skills. and spend your days coming here to read my comments.

Most working in financial planning / financial services have skills to find other positions in the financial services sector (or other professional services sector). Most professionals have a plan B, plan C, etc. Some have already left (with hopefully a big fat redundancy payment) and found other work or retired. Some are planning to leave and find a new role or retire (after receiving the big fat redundancy payment). Most professional are smart enough to look after themselves and seem to get on with life and the changes presented. The alternative of whinging on a website (or reading whinges on a website) most likely does not appeal.

What this Anonymous said. Most people can handle change and adapt accordingly.

most people working for dealer groups are not professionals. they are admin people.

There is a combination of professional roles and administration roles. Those that work in administration are likely to find another administration role in financial services or another industry. They will be fine.

you must be an admin person who has not taken kindly to the oracle's notes. you may also be disillusioned about your prospects going forward.

as a fasea passed adviser with a master's degree, I am telling you that most people in dealer group land are incompetent and will face great difficulty being redeployed in any other capacity.

do you understand? is it clear.

I (luckily) don't work in financial planning but for a company that fortunately does not have an aligned dealer group(s) attached.

Worked on and off with dealer group leaders and senior staff over the years. They move between non-dealer group roles easily and the administration stuff will find other administration roles in other sectors.

I think you are worrying too much about dealer group staff and their futures, most likely more than they are. They'll adapt, they understand their sector is about ongoing change.

I've met many who work in financial planning firms, once again most of them seem to move between roles in and out of the financial planning sector and seem very adaptable to change.

Sounds like you are enjoying your master's degree and looking forward to your future in the profession.

Whilst I agree that there isn’t any point whinging on a website since nobody is listening and nobody cares, most “big fat redundancies” have already happened. Most people left are small business owners that don’t have a redundancy coming. Many are trapped with a big fat debt hanging over their heads, many, many times larger than any “big fat redundancy” anybody else received.

Whilst it’s easy for people like you to sit on a high horse, these changes have cost people hundreds of thousands of dollars for no benefit to customers. Yes, we all need to adapt, but you can’t expect that it isn’t going to frustrate people. To quote an old song....... you would cry too if it happened to you.

Didn't know the horse I was sitting on took drugs. Might need to get the horse tested. So with all this debt and hence potential bankruptcies for financial advisers, don't we need all the financial planning dealer group professionals and administration staff to find other work so that they can keep paying taxes to assist in paying the bankrupt financial advisers Centrelink payments? Or are the bankrupt financial planners looking for administration work outside the financial services sector?

So many hangers on in this industry so that can be expected...but also advisers are happy to sit the exam....they see it as one last challenge and want to leave with there heads held high saying I was just as good I passed....but they're not prepared to do the study.....So they'll sit the exam and say I was just as good and then walk away.

Why has FASEA not been linked to big bad banks and other institutions' employees who confessed before the Hayne Royal Commission? Punishment to the bank's employees product push sellers in big banks should be made to sit the FASEA exam and these bank's employees should be listed in ASIC's Financial Advisers Register to pay their share of ASIC Industry Levy by their Bank's enforcement costs, and not Levy the small independent advisory practices who were not called before the Hayne Royal Commission. Bank's employees product push sellers must go up on ASIC's Financial Advisers Register because they will need to comply with ASIC RG274 "Product design and distribution obligations" becoming operational next financial year. When is Domestic Governance going to stop pandering softly to the big institutions and close the bad institution's 'black holes' that has defeated functional regulation since FOFA Act 2002, that became operational in 2004 and continue to "shoot the wrong dog" who are small independent, non-aligned advisory practices, delivered services to the same cohort of clients for the last 20+ years?

ross, friendly advice. you are putting yourself out there mate. this is a total debacle, when the time comes there will need to be found a scapegoat. I fear they might make it you. I'd quietly exit like all the smart ones out there if I were you.

From 2009 to 2011, I studied and pass LLM(CFL) - Master of Laws in Corporate & Financial Law, because I feared the Law 'blame game' that could flow from the Global Financial Crisis. During 2020, I have drafted and submitted 4 complaints to The Office of the Senate 'Joint Parliamentary Committee on Corporations and Financial Services' - no action results yet? A journalist for Financial Standard emailed a copy of Hansard on the Committee's questioning of ASIC (19 March 2021) and I used ASIC quotations before the Committee to complain about the 2019-20 Industry Levy, and I am waiting for decisions? I have no where to hide, why? The public service plays by rules, but we are the subject of obligations and we need to perform to our obligations to (1) defend the interests of your clients, (2) defend the interests of our Authorised Representatives who are performing obligations directly with their clients and (3) defend the ongoing viability of our business practice management from external abusive sources. The evasion of responsibility does not want to comprehend that Adviser Services Fees are going up in 2021-22 caused by ASIC Industry Levy on small advisory practices, which will be disclosed in Rg274 obligations to clients and my client documents will blame ASIC's Industry Levy model, where I will attach a copy of ASIC's Invoice to client documents, to comply with transparency. As I said to Judge David Ashton-Lewis (retired) in 2008, we need to write our defence in client documents to substantiate the performance our obligations, then when our client signs off, our client can also be our defence witness and our advocate.

ross, you are no doubt highly qualified. there are many pieces to the puzzle that is financial advice. I am not a conspiracy theorist but I am gently warning you as a professional colleague. we are mere pawns of other (bigger) people's insidious games.

i'd keep quiet and move on, remember once you are no longer a registered adviser then you can lob grenades (metaphorically speaking of course) from the sidelines.

be watchful. they are looking for a scapegoat. Ross Smith, Adviser. that's it, you are damned instantly. i'd keep quiet if I were you or they will come and say YOU ARE IT>

Keeping quiet is why we get rolled over all the time
Keeping quiet gave us fds, opt in , fasea, lif. Now isnt the time to be quiet, its the time to make as much noise as we can. Anyone that dosent is part of the problem. Keep going Ross, we are all behind you, the ones with guts at least, dont listen to the lily livered ones, they are we why we are here in the first place.

If you put in the study hours you will pass the mickey mouse exam. This is really not the issue. There appears to be a concerted effort to make our industry too hard to bother. Need to understand who will eventually benefit from this madness, You should only need one guess.

Can we talk about escape plans?
I'm a 47 year old planner with 24 years experience and have passed both the FASEA exam and education requirements and if something came along that got me out of this industry I'd take it in a heart beat!
My problem is that with a mortgage and a young family I need something that pays pretty well and I just don't see what alternatives are available for someone in my situation.
Has anyone got any (legitimate) ideas of what to look for?

Good Question Big Fella, I am in a very similar situation to you. The simple fact is that Financial Adviser is the job you are best qualified for. The work will be harder and the salary maybe less than what it was before but most likely will be better than what you can get elsewhere. We just have to concentrate on building up our client bases of exclusively wealthy clients ($1m plus portfolios). With adviser numbers halved there will be less competition and more clients to go around. Smaller clients are no longer our concern.

There are many that have moved on to become money coaches, a new unregulated occupation, free from the shackles of ASIC and FASEA etc. Whilst some will retain the FA status and education, there'll be many that do not have any real formal financial education or qualification. All you need is a coaching course to become a "coach" and bob's your uncle! its the next big thing causing issues

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