Is it too expensive to maintain planners on register?

ANZ Banking Group, which accounted for this week’s biggest loss of 20 adviser roles, has explained the roles which were formally taken off the Australian Securities and Investment Commission (ASIC’s) Financial Advisers Register (FAR) were mostly supportive roles, such as paraplanning, and the staff will remain at ANZ. 

According to HFS Consulting’s director Colin Williams, such movements might herald a new trend as maintaining the required training and skills to be classed as financial advisers would mean higher costs for organisations and become risk prohibitive. 

“I am confident we will see a lot more of this as the year progresses as it is getting too expensive and risky to keep staff registered as financial advisers. I expect to see more support staff and other roles such as accountants who occasionally provide advice to be removed from the register,” he said. 

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This week GWM Adviser Services continued to lose adviser roles as it accounted for the second biggest drops in adviser number, with six more roles gone, on top of 12 roles which were removed from the register last week, according to HFS Consulting’s analysis. 

Also, one of the groups owned by Easton Investments, The SMSF Expert, posted this week a loss of three adviser roles while four other licensees (Affinia Financial Advisers, Axies Pty, Charter Financial Planning and Commonwealth Financial Planning) all lost two advisers. 

Source: IFS Consulting 

According to Williams, in general adviser losses definitely slowed over recent months and between the start of January, 2020 until today there was a net loss of -2,950 advisers of which more than 2,200 happened in the first half of 2020. 

In total, this week saw 41 Advisers appointed to 35 licensees, 39 being advisers who switched from another licensee and two being ‘new’ provisional advisers.  

At the same time, 67 Advisers resigned from 33 licensees, leaving the net (-26) reduction in adviser numbers. 




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Of course adviser numbers are going to continue to shrink - the simple cost of having someone on the FAR register now with increased PI costs and the ridiculous ASIC levy arrangement that requires AFSL's to write a blank check for ASIC without any sense of what needs to be budgetted for. ASIC claims it miscalculated its enforcement expenses by 60% - other than successful operations against its 2 most senior people it has achieved very little for the 60% increase over its July Budget expectations. ASIC are the largest example of Fee for No Service in the Financial Services Industry.

With a 160% increase in the ASIC Supervisory Levy in the last 3 years (as reported by the FPA to its members earlier this week) it's no wonder licensees are removing non income earning support staff off the FAR. If this type of increase originated from a private firm, the usual consumer groups would be "outraged" and it would be all over the media. Yet, financial planners are "consumers" of ASIC's "services" (and I use that term very loosely). Now you would think that as compliance costs are a significant factor in the cost of advice, that these consumer groups would be lobbying government to reduce such costs as the ASIC Supervisory Levy. However, all I hear is the pin dropping on the carpet.

I think the cost of PI will exclude me from the industry before ASIC's fee, but it could still be the straw that breaks the camel's back :P

I think the cost of PI will exclude me from the industry before ASIC's fee, but it could still be the straw that breaks the camel's back :P

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