On the latest episode of the ifa Show, Philipa Hunt – director of Artemis Investments – slammed FASEA as a “debacle” after it wound up at the end of 2021.
“FASEA was a mess from day one,” Ms Hunt said.
“The fallout from FASEA is the style of the exam itself.
“And also the fact in the original parts of it, there was no recognition of prior learning. So that’s now been addressed because when advisers set this industry up 30 years ago, nobody needed a degree. There was no such thing.”
Currently, existing advisers with no degree must have an approved qualification by 1 January 2026.
Earlier this month, it was revealed that just over 30 per cent of candidates passed the February exam and Ms Hunt noted that changes must be made by the government, saying: “We’ve now got roughly 3,000 advisers who have yet to sit in the exam and pass. We can’t afford to lose another 3,000.”
“We actually have to do something about the remainder of the FASEA exam because if these people have done it twice and still can’t get through it, some things are missed there somewhere,” Ms Hunt said.
“Also, the fact that they’ve now recognised experience and the problem that we’ve got with getting all of this done by 2026, those who are within five years of retiring now will go.”
Ms Hunt, alongside Forte Asset Management founder and director Steve Prendeville, have teamed up for a new survey that seeks to ascertain the current mental and emotional health of financial advisers in Australia.
The survey looks at the mental and emotional health of planners, as well as FASEA, LIF and the effects of both now. It is targeted to all financial advisers, including those in insurance and investment, as well as staff who work with and for advisers.
To complete the survey, click here and listen to the full ifa Show episode with Ms Hunt and Mr Prendeville here.
Let’s just call it what it is – FASEA and ASIC are just “Yes, Minister” and “Yes, Prime Minister”. Similar cast, similar ridiculous stories, same ridiculous yet perfect illustration of public servants doing all they can to keep themselves and their mates in jobs, with the occasional angry little man with a power trip sticking his head above the rest to make a noise. The only difference is the shows were entertaining, while the reality of both organisations is a shame that should be shared by both Liberal and Labor for the disgraceful lining of public servants’ pockets with no form of oversight or logic.
Dear Anonymous (last post) as a Lecturer in Financial Planning with 10 years of experience in academia, and a Practice Principle with 2 Masters’s Degrees – you are spot on!
I think Thomas Sowell nailed it when he said, ‘You will never understand bureaucracies until you understand that for bureaucrats procedure is everything and outcomes are nothing’.
As a professional instructor/trainer in a former life – so 20+ years of training people and examing them for their respective competencies.- the FASEA exam is an embarrassment. The intent is good and worthy – but the execution with answers to questions on matters of fact / and or law is at best tragic. Consistent feedback is that well-educated competent people are unsure of how they went. – there is uncertainty – ambiguity and a large element of guesswork around what the examiner is chasing. but the real clincher is the ivory castle is impervious to feedback – all-knowing – with that many people still being “euphemistically failing to reach the required standard = failing) its time to have a look at the construct of the exam itself.
The concept of FACEA was correct for the right reasons. The actual composition of the exam was a great failure put together by “ no idea academics “ out to make a quick quid and with terrible delivery. The damage is done, let’s see what the next ten years reveals for those remaining.
This whole mess is just emblematic of a catastrophic failure. We have highly competent, honest advisers with unblemished compliance records being made to pass exams to prove that they know what integrity is and how to be honest and then still, having to effectively complete an under graduate University degree to continue in the industry.
At the SAME time, we have Dealer Groups owned and operated by a wide variety of individuals – but with no requirement to complete all the above and then we let these people run a vertically integrated advice business, where (in some cases) greater than 90% of clients money ends up in the Dealer Group owned PRODUCT.
It is farcical!
It’s a total furphy to say advisers didn’t need a degree in the past, and there weren’t any anyway.
There have always been plenty of high quality degrees in other disciplines, with varying amounts of financial planning related content such as finance, economics, tax, law, behavioural psychology, maths, computing. More importantly however, any degree in any subject teaches the important skills of research and analysis. These are the most important skills of all in financial planning, which by its nature is constantly changing, and no two client situations are ever the same. Professionally minded financial planners in the past did degrees in other fields and topped them up with specialist financial planning courses.
The intention of the FASEA legislation was to ensure all advisers met this level, not just those who opted for professionalism. It was never intended that FASEA would ignore the prior training of degree qualified advisers. Unfortunately course providers on the FASEA Board appear to have hijacked the legislative intention for their own benefit.
I just love all the people that have completed the studies etc looking forward to the pot of gold at the end of the rainbow in terms of higher wages/revenues etc with reduced planner numbers. I cant see how any of us will create more hours in a day and youre already assuming that clients will simply agree to much higher fees based on supply/demand metrics.
All i see is more cost for clients. And less jobs for hangers on in the industry like BDM’s etc who wont need to be as many simply becuase planner numbers are and will continue to decline. There is no magic panacea of huge student numbers coming through nor is there likely to be.
I suggest everybody be very careful what you wish for.
And for context – I will be 53 in 2026, Ive passed Fasea but am not yet degree qual. I have been a planner for 22 years with zero conduct issues/ASIC reports etc.
Will I be hanging around beyond 2026? I wont rule it out completely but it will come down to the education requirements – I have competing life issues for someone my age (huge care requirements for ageing parents etc).
What is happening is this:
Some Advisers leave the industry. The remaining advisers pick up these (HNW) clients with big balances…Adviser income increases. The advisers realise they can have more time by dropping 5 clients with small balances and replacing these 5 clients with 2 or 3 more clients with very big balances…rinse and repeat!
Eventually you have 80 clients per adviser with FUM of $64M plus instead of running your butt off trying to service and keep compliance with 150 plus clients with similar FUM…
So the smaller clients lose out………..exactly my point all along. So much for ethics.
Ethics? Depends on your frame of reference.
The proactive advisers who have figured out, that to remain in business in future, they will need to meet the expectations of their ‘paying / profitable’ clients. By this, I mean the clients who are paying a fee that is not being subsidized by other clients. With Compliance costs steaming ahead, ASIC’s recovery fees steaming ahead. AFCA’s recovery fees too, the days of Pro-bono and subsidizing unprofitable clients is pretty much gone.
In any industry there are three types of businesses entities, Good Businesses, Bad Businesses and No Business. Bad Businesses lose money and will subsequently go out of business, No businesses may break even , but with no profits, will ultimately close, Good businesses will continue to exist to serve their clients.
The future of financial planning businesses has been forced by those who made the financial planning rules. The 40% or so of advisers who have already left have seen the writing on the wall for their business prospects and have opted out. The battle ground in future will be to service HNW individuals competitively, clients who quite frankly won’t care too much for paying excessive fees to subsidise other clients…
Totally understand your hesitance.. I did my Masters degree with a husband who travelled 13 weeks of the year and two children who needed to be ubered everywhere.. I did it two subjects at a time but I can honestly say I learnt more on the job than I learnt in my degree. I am happy I got my degree for the personal challenge but I have had great mentors who have shown me on the job training that no degree ever will.. Do we as an industry need to move to qualifications – yes but surely experience should count.. Also I have completed a Masters in 2016 and I sat Ethics but guess what I have to sit it again. I also sat ethics for a nursing degree.. I wonder how much more ethical I can get!
A couple of points if I may;
1. Does anyone know of a Politician or senior public servant with any “Ethics?” yet these people come up with these ideas.
2. For the ones supporting the Ethics Exam suggesting that they are better than some of the older advisers within the Industry then tell me this, does an exam prove you have ethics because I would have thought ethics come from inside of the person and you either have “ethics” or you don’t!
Before you ask, ‘yes, I have passed the ethics exam!’
Do any federal politicians hold “relevant” degrees or practical industry experience for their positions? Especially those in control of sizeable portfolios? When was the last time we had a Defence Minister with an armed forces or international diplomacy background of studies and experience? Or a Treasurer with a Masters in Economics & Accounting?
Is it sufficient for an ASIC analyst to have 3-4 years of financial planning experience to only discover they can’t hack it, and then move into a role judging the advice of other more experienced and committed professionals? How about an ASIC Delegate who has experience in law but no concept of Financial Planning in its practical sense and can’t even use a calculator or google? You’d be surprised how underqualified, inexperienced and inappropriate those in power over the industry are.
Their answer is to create tick-boxes for every issue which usually results in a piece of paper being required by practitioners as if that’s the only way.
Show me an electrician or plumber who has reams of papers behind them having come from theoretical studies instead of 20 years+ experience on the job and I’ll show you who I’m not going to pay to fix the electrics on my family’s car or the plane that takes us on holidays.
For those advisers remaining it just continues to boost our worth – make the min qualification a masters + FASEA Exam a yearly event and watch those who can survive salaries skyrocket! Survival of the fittest
So your’e equating reducing planner numbers to higher fees and wages. Mythically assuming the clients agreement to higher fees and also that youre able to make more hours in a day for the extra work. Ok………..
I could run with that but you would need a trade off to get rid of a lot of the compliance rubbish ie yearly fds
Yep. Not to worry about the others. Nice to see our brothers/sisters stick together.
Given the complaining and many Advisers unwilling to be personally accountable, it’s looking likely to be an annual FASEA exam. Advisers are going to be easy targets for others mistakes for decades to come. Just Look at the CBA Advice scandal that resulted in FASEA, the relationship between those claiming to advocate on our behalf and I can’t see nothing that’s changed. What has changed?…Not much really. So an easy solution if you’re wanting to blame someone is to call for an easy online open book “annual” exam.
Speaking for myself, it’s a shame, because looking after middle class (social security, plus retirement income) meant a range of clients. Once upon a time we were also able to look after accumulator clients (young families with mortgages was a reason to review insurance and super). This variety was part of the fun, and now that’s mostly gone. Nothing to do with FASEA, everything to do with costs and compliance.
Pfft please, Masters level was easier than undergrad! You want to dance? Let’s talk CFA levels…
Matthew, I am one of the 1/10 advisers you don’t know.. I started in 2004 at age 47. I not only completed mandated training (the old Dip FS) then in an effort to future proof my self employed career, I completed Adv Diploma in 2008. I passed the FASEA Exam first time easily and achieved distinction in ETHICS course. I’m 64 now and because I didn’t have a relevant degree I still have 6 units to complete (not 1-2 as you say). After 18 consectuve years as a financial adviser how many more years do you need for ‘Recognition of Prior Learning’ (RPL)?. Its a pathetic joke that I have to re-sit units in: Insurance, Superannuation, Investing etc. FASEA’s downfall (in part) is poor accreditation for RPL.
I’ve never voted Labor in my life, but if Stepehen Jones stays true to his word I will voted Labor. I’ll be a young 69 in 2026, but I won’t do 6 more study units. I have a superior rating on Adviser Ratings, my skill, knowledge and experience and mentoring will be a sad loss for the industry. I’ve had enough.
Well said, I am in a similar situation and past experience and refuse to go back to do all this study, just to work a few more years. Time to say goodbye in 2026.
No recognition for prior learning??
A new entrant to planning needs to have a 24 subject bachelors degree. In contrast an existing planner has to complete up to 6-7 subjects of a Graduate diploma, even less depending on what other study you have done.
So any who says that there is no recognition is just kidding themselves.
Annual CPD requirements are open to rorting. How many times have you gone to an event/PD day & seen half the room on their phones for 90% of the time? There is no requirements to show an understanding of what you’ve just sat thru, just a need to have your name ticked off. No wonder there was no allowance given to it by the legislators when they set down the law, it wasnt something that was decided by FASEA.
In 2004 and 2008 you could have elected to complete Post Graduate qualifications, rather than the easier Diploma courses. You would then have an approved degree.
Since FASEA being announced I and many many others have gone out and completed a Masters Degree. You’re complaining about 6 units. The bottom line is you operated at minimum standards for 18 years which lead to Government intervention and now over regulation. You had 18 years to do more than a Diploma. Perhaps instead of doing the minimum and being part of the problem you get ahead of the curve and be part of the solution.
I’m 71 been in the industry since 1984 just passed FASEA (second attempt), I also received a distinction for the Ethics course and a credit for Investment course, I’m currently 3 modules into SMSF course with SMSF Assoc’ and will do the other modules to get my Grad’ Dip’, I’m enjoying the challenge and the extra knowledge I can bring to my clients.
We know FASEA has been a mess since day 1. But the advice community has largely done what they need to do. We’ve had to sit a pointless exam and the most good advisers have got through it so they can continue to build and grow. The last remaining bunch are the bottom of the barrel that have ignored it and tried to do business like it was still the 90’s so the pass statistics are not a surprise. We know the exam was designed to clean out the ‘olds and bolds’ and it is doing that. Don’t hang on too long. Get a good price for your book and enjoy retirement.
Blame the FPA And AFA for this – it was their job to represent advisers but they just represented themselves and the big groups .
I passed FAESA exam so thinking selfishly I do not care, but for someone who loves the industry I’m angry and frustrated.
This is the outcome when politicians introduce half baked rules without understanding the consequences. I remember presenting to our local liberal Federal mbr and was blown away by how much he didn’t understand.
It’s time for the industry to stand up as one.
FASEA was a clown show driven by academics with no understanding on anything beyond theory. The main focus was on the hip topic of the day “ethics”. When challenged with real life examples they acknowledged they couldn’t provide a course of action that would meet their code.
However, put that aside and now consider the exam.
Financial advice should have always required a degree and must require a degree. If someone can’t pass the FASEA exam and doesn’t have a degree then they should find another field of employment.
I’m 65, have a relevant degree and had no issues with the exam but rebelled against the Ethics garbage. Yet I did what was required. It is totally unacceptable that those who have satisfied the requirements to remain are now being penalized by allowing those either too stupid or lazy to remain. Our standing as professionals is brought into question if this happens.
I stayed well clear of this field for years as it was the domain of broken down old grifters re-inventing themselves.
What they do is not advice.
FASEA implemented what the politicians had gifted them in the law. There was little scope around what was legislated.
That includes the exam & the areas that it covered.
100% agree that a 4-unit Diploma course was way to low a barrier to entry & needed to change. I wouldnt vote for a government that will make changes to water down requirements for those who, as you say, have been too stupid or lazy to have completed the requirements by the now twice-extended deadline.
Why are we extending a lifeline to planners who have failed to plan??
You could not be more wrong about FASEA having little scope. The FASEA enabling legislation was not particularly prescriptive at all. It left all the detail to be filled in by the yet to be appointed “Standards Body” on the assumption it would be run by competent, impartial people who would do the right thing. That assumption was sadly flawed.
When it became evident quite early on that FASEA was being badly run by incompetent bureaucrats and a Board riddled with conflicted individuals, Hume should have intervened. But she did nothing. She gave FASEA free rein and eventually let it die a slow and natural death, while its badly designed rules and standards live on.
Financial Planners have only themselves to blame. Don’t blame FASEA, Don’t blame the Government. These are well known issues since 2018. An exam designed, not to test knowledge, but to cull out. If you can’t get proper representation to put forward issues you need to start asking questions of those bodies that claim to advocate on your behalf. Have a look at yourself too. You pay $1,000 a year for three little letters of CFP yet are happy to sell out your peers and Australians. That body in return for your $1,000 then represents “all participants” in the advice industry” it dosen’t even represent you….secondly do you really think your licensee linked to some product manufacturer is going to look after YOU? Advisers need to ask the hard questions yesterday.
No. I do not agree with you. I blame politicians for the debacle
Some harsh truths here. I resigned my membership and with it the CFP designation years ago because I felt that the FPA were not representing me and were in fact representing their corporate sponsors.
Having said that – the whole industry is an unholy mess and no one has covered themselves in glory at the institution / association level.
What concerns me is the FASEA fallout of advisers leaving, the loss of self confidence for those who the exam took a few attempts to pass or not. In the FASEA submission presented to and discussed with politicians in December 2018 was 10,000 advisers would leave. The average clients is 250, 2.5 staff mostly women and $600,000pa average turnover. So we are close – 10,000 advisers leave, 25,000 mostly women staff made redundant, 2.5 million clients lose or change their trusted adviser, $6bn lost revenue per annum and taxes foregone. Do the maths. Can we retrieve the lost advisers or retain experienced advisers in mentoring, training, business prospecting roles to retain clients if they don’t pass the exam? Who has the time or resources in their business to train new advisers when compliance costs are increasing?
So please do the survey and help us gather the figures and your story to help us to help you.
What absolute garbage. If the 3,000 advisers yet to pass have not got their act together by now, they don’t deserve to be in the industry. Additionally 9/10 advisers I know have prior learning and only have to do 1-2 top up subjects by 2026. Hardly an impost. Additionally we need to stop referencing back to ‘the good old days’ when advisers were gouging clients left, right and centre.
Completely agree. If you cant pass the exam at this point you shouldnt be in the industry. I passed first attempt and did minimal study, it wasnt that hard.
I disagree with you on one point – do we need a degree Absolutely.. However, the Fasea exam was a waste of my time and I can understand older advisers failing it if they have had no experience taking exams in recent times. The format of the questions with the use of negative and positive language in the one question was designed to confuse rather than assess if someone was ethical. And yes I passed first go..
I agree. FASEA has been a massive and well overdue clean out of the industry. Now we need some representative bodies that are looking out for advisers and not the big business donors.
You just wonder what would have been the outcome if the govt minister of the time had not chosen their friends in academia and actually looked to use the shared experiences of people like Philipa. People who had previously been in academia but also spent decades providing actual advice to the public. Doing the applicable course is not the same as providing actual advice to real flesh and blood people.
Had the approach been different we may have got a very different outcome that not only benefited advisers, but also their clients. Clients who had already worked out who they could trust and who understood the personal comfort zone of the client in terms of investment and insurance needs..
Maybe Stephen Jones will approach it differently?
Jane Hume, friend to vertical integrated AI solutions, needs to rewatch Terminator or the Matrix and see what zealous pursuit of myopic goals can achieve.
I did ethics in my Masters degree Commerce (Fin Planning) in 2016 and passed with distinction, I also sat it for a nursing degree back in the late 80’s and passed but guess what I have to sit this subject again to prove I am ethical and understands ethics.
It’s a rort basically lining the uni pockets for an unnecessary revisit of a subject. That will be $4k thank you ..