AIOFP says it’s time to win back lost advisers

According to the executive director of the Association of Independently Owned Financial Professionals (AIOFP), the “survivors” are going to be in great demand moving forward.

Mr Johnston blames the government for the exodus of 10,000 people from the industry.

But “despite their draconian and brutal approach”, Mr Johnston believes the government has done the survivors a big favour.

“When you break down and analyse the numbers of the circa 10,000 advisers who have left the industry so far, there is a golden lining for the survivors,” Mr Johnston said on Thursday (10 February).

“Around 8,000 were bank employees and accountants who had to decide on being an adviser or not, the remainder were independent advisers who either took the opportunity to retire or were spooked out of the industry with the government’s tactics.”

This, he said, has created a “very favourable supply and demand scenario for the survivors with new client opportunities”.

Moreover, Mr Johnston noted that if advice costs were to decrease, and given only 27 per cent of the population has an adviser, “advisers are going to be in great demand going forward”.

Reacting to predictions that a further 3,000 advisers could exit the industry within the next 12 months, Mr Johnston said the focus now needs to be on winning back some of the lost advisers.

“Bank advisers who were on the education pathway and the experienced risk and general advisers should reconsider their position. A moratorium of six months should be extended to these advisers to decide about re-joining under the previous regime,” the AIOFP head said.

“With the 10-year degree rule now agreed to by both sides of politics, we now need to get the FASEA exam format modified to suit its new purpose – not to kill advisers, just to make sure they are competent in their selected field.”

Mr Johnston hinted that the AIOFP will be advocating to ASIC and the government for a “more relevant format” with greater flexibility and better sitting conditions.

This includes seeking a new “positive curriculum” containing specific questions pertaining to an adviser’s area of expertise to demonstrate competency alongside the mandatory ethical segment in a simplified format.

AIOFP will also be pushing for a “verbal aptitude test”, which would allow advisers to respond to exam questions in a verbal format.

“In some cases, the more experienced advisers have not sat for an exam for decades and deserve to be extended some compassion and consideration,” Mr Johnston said.