Consistent with other research, the latest data from Investment Trends has confirmed that the exodus from the financial planning industry in a Post-Royal Commission post-Financial Adviser Standards and Ethics Authority (FASEA) world will not be as significant as originally feared.
The Investment Trends data revealed that only 11 per cent of financial planner respondents said they intended to leave the industry if the full recommendations of the Royal Commission were implemented, while seven per cent said they would cease providing advice when the FASEA regime came into effect in 2024.
The Investment Trends research also confirmed the tr4end toward self-licensing, with almost a quarter of respondents saying they either operated their own Australian Financial Services License or belonged to a self-licensed boutique.
It said that a further 10 per cent of respondents indicated they intended the same route within the next 12 months.
However, Investment Trends Director of Research, Recep Peker said that dealer group model would continue to be significant, with most financial planners continuing to rely on dealer groups and over half (55 per cent) intending to remain in their existing dealer group.
“Dealer groups remain the backbone of the financial planning industry, and many planners believe that the support, guidance and services provided by their dealer group outweigh the self-licensed model,” Peker said.
“Still, dealer groups can do more to support their network of financial planners. Among those who are part of a dealer group, nine in ten (91 per cent) seek further assistance from their dealer group – from support with lifting back office efficiency to ongoing client engagement,” he said.
Comments
1 Jan 2024 is a potentially misleading date. Other studies have suggested that 1 Jan 2021 will be a critical date as that's the deadline to pass the FASEA exam. Advisers who don't want to do additional study to meet the FASEA's education standards are even less likely to undertake the FASEA exam.
That is because most Advisers have not yet reviewed the FASEA Code of Ethics and Explanatory Memorandum which comes into effect on 1 January 2020. Business models will need to change dramatically!
When Advisers have their light bulb moment in relation to the ramifications of the Code, it is likely it will tip even more over the edge. I wouldn't be surprised if we lose as many as 40% by 2024.
Add new comment