One of Australia’s biggest risk-focused financial planning groups, Synchron has lost around 20% of its advisers, with a major contributing factor being the Financial Adviser Standards and Ethics Authority (FASEA) regime.
Synchron director, Don Trapnell said the planning group had successfully managed to replace the departing advisers but predicted that the latest round of the FASEA exam would fall substantially short of the 90% pass rate reported after the first exam.
He said this all represented proof that the FASEA regime was geared towards financial advisers rather than life/risk advisers and why those advising on life/risk needed to operate under a different designation and be treated differently under the FASEA regime.
Speaking to Money Management, Trapnell said that the 20% departure rate from Synchron had been generated both by the FASEA regime and by the company itself moving some advisers along in the knowledge that they were not suited to the new environment.
He said that while there had been a 20% exit rate at Synchron, adviser numbers had remained almost static because there had been no shortage of advisers seeking to join the company.
Trapnell said that Synchron had had the luxury of being able to pick and choose which replacement advisers it decided to bring on board, with the reputations of the advisers’ former licensees playing a role in the decisions which were ultimately made.
Trapnell said that risk-focused advisers had found the new FASEA regime and increased regulatory scrutiny highly stressful with less life/risk cover being written – something which was also being evidenced in the data produced by the Australian Prudential Regulation Authority (APRA).