Just 16,000 advisers are expected to remain in the industry by the end of 2021 as the financial planning sector deals with the fallout of the FASEA regime and other regulatory changes, according to new data.
Speaking in a recent presentation, Adviser Ratings chief executive Angus Woods said the group had revised down its previous predictions around the number of advisers that would remain in the industry once the FASEA standards came fully into force.
“The run rate continues to be quite steady, so if we play that out as it is at the moment, we expect 12,000 advisers lost from the industry from its peak,” Mr Woods said.
He added that with pass rates coming down in the latest FASEA exam sessions, and advisers running out of time to take the exam with the bill to extend the compliance date currently stuck in Parliament, it was likely that significant numbers of advisers would exit the industry in the coming months.
“Those who are more confident tend to sit the exam first and that shows in other industries,” Mr Woods said.
“We are seeing bigger failure rates from re-sits of the exam which isn’t great, and that is going to be a cause for concern once the FASEA exam [bill] gets passed given the amount of advisers who will have to re-sit.”
Mr Woods said around 16,000 advisers still had to sit the FASEA exam, and this remaining cohort were older on average than those who had sat the exam and passed.
“There’s advisers who for 20 to 30 years haven’t sat an exam, some of them are reading about it on social media and that causes further anxiety for some advisers. So we will continue to see more advisers exit between now and 2021,” he said.
According to Adviser Ratings data, more than 60 advisers had left the industry in the month to 11 June alone, although a large number of these had been due to the licence suspension of dealer group MyPlanner.
A further 36 switched licensees during the month, with 11 joining Melbourne dealer group Avana, four advisers joining Australian Advice Network and three joining Centrepoint Alliance’s group, Alliance Wealth.
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Comments (18)
They have made this too hard and common sense will tell you how this plays out as we are already seeing...and yes advice WILL NOT be for the common person...do we care? perhaps not...but the process involved for the ones who can afford advice still make it highly stressful, full of red tape and completely over regulated. I sadly feel that any good innovation just won't happen now as who would invest into this rapidly shrinking stink fest
A not to all advisers. Dont waste your time with FASEA or further training. ASIC have no problem with mortgage brokers recommending SMSF's with no training or compliance. ASIC have no problem with real estate agents tieing someone to a 30 year investment with no training or compliance. ASIC have no problem with backpackers recommending Income Protection with no training or compliance. ASIC have no mproblem with stock brokers collecting commissions on life changing trades with only minimal training or compliance.
Basically, you have to be an idiot to be an adviser (unless you are dealing with the top 1%).
You can still provide retirement advice, investment advice, insurance advice, SMSF advice etc and help the client with the paperwork. Just dont be a registered adviser and dont call what you do financila advice. You will just have to bill the clients individually from their bank account instead of from their managed funds/super.
But it's a moot point when ASIC chooses to ignore all these illegal and incompetent advice providers. ASIC's primary focus is persecuting licensed advisers. They are not focused on protecting consumers.
You cannot advise on these things legally. However ASIC has no problem with everyone else giving advice on these products other than qualified financial advisers. Just call yourself a Money Coach, charge the client directly and you can advise on whatever you wish. There are so so many people doing exactly this already.
It is obviously what ASIC and the regulators want (otherwise why would they make it almost impossible for advisers to exist). It will turn into a similar situation to building and there will be lots of phoenix companies when the "advice" given by all these unregulated and uninsured money coaches goes wrong. This was the inevitable result of all this over regulation, increased costs, increased training etc which makes it almost impossible to service anyone but the super wealthy.
The outcomes for the client will be far worse than of they went to a regulated and insured financial adviser, but ASIC and the government and the banks/super funds etc want to eliminate the adviser so this is going to be the only way to remain independent and service the majority of clients.