‘High quality advisers’ will be driven out of the industry: CEO

In the latest episode of the ifa Show, Lifespan Financial Planning CEO Eugene Ardino said the industry will see “enormous attrition” as a result of FASEA.

“Sending a group of advisers who have been doing their job unblemished for up to 20 years back to school … I don’t know if that is a solution,” he said.

“The industry will lose a lot of high quality advisers. It will lose some low quality ones as well. I think most advisers should be able to get through the exam. I think the major issue will be all of the studying.

“Let’s face it, this is time away from your family, your children. Grandchildren in the case of some advisers.”

The chief executive also questioned the government’s success at consulting with the financial advice industry over the years. Particularly when it comes to the Life Insurance Framework.

“It comes down to making it simple enough to comply with it easily but also simple enough so that the disclose allows clients to understand what you’re talking about,” Mr Ardino said.

The CEO said the phasing out of life insurance commissions will result in less insurance being bought.

“We wrote a 40-page submission explaining that three years ago,” he said. “Rice Warner estimated Australia has an underinsurance problem of around $2 trillion.”

“They made that estimate four years ago.

“I think in the absence of any systemic failure and incidence of consumers being hurt by bad insurance advice, I would say that the underinsurance problem is something there should be more emphasis on.”

Listen to the full interview now.