Addressing a media conference in Sydney on Tuesday, Synchron executive director Don Trapnell said the licensee had lost approximately 10 per cent of its adviser force in 2019 primarily due to the demands of the new FASEA standards, and expected closer to a 20 per cent decline in 2020.
“At the start of last year, John [Prossor] and I assessed that about 10 per cent of Synchron advisers would not make the journey with us by the end of 2019 and we were spot on – about 50 reps moved on, most of them leaving the industry because of the exam requirements,” Mr Trapnell said.
“Our state managers have a strong emphasis on recruiting so we had a net 30 [adviser] increase [in 2019], but when you add that to the 50 that have gone out, we had to put on 80 people to get to that number.
“I would suggest the next 12 months is going to be harder – if you asked me whether a 20 per cent loss is reasonable, I think that’s probably very close to the number of advisers leaving.”
Mr Trapnell said those electing to leave the industry were primarily older risk-focused advisers, which was likely to be exacerbating Australia’s underinsurance problem, with Synchron sales figures reflecting a significant drop in the numbers of clients taking up life insurance.
“The guys who specialise in life insurance are the ones that are struggling to handle the FASEA requirements and the additional compliance requirements that are happening in our industry. As a result of that, turnovers in life insurance companies are down and new business is down dramatically,” he said.
“We are the second-largest writer of risk new business in Australia and we had a $500,000 reduction in new business in the last 12 months, and other licensees have lost a lot more than that, which means consumer protection is down, which means long term our social security bill will be up.”
The comments come following a recent Adviser Ratings report, which estimated over 4,300 advisers had left the industry in 2019, bringing numbers to their lowest level since 2015.
Given these dramatic declines, Mr Trapnell said the government should look to hold off on any further actions that could inadvertently push more advisers out of the industry given the possible impact on public spending, including the full phase-out of life commissions that had been floated as a possibility following the royal commission final report.
“I don’t think there’s any hidden agenda within government to decimate our industry – I think the government is trying their hardest to improve our industry and improve the public perception of the industry,” he said.
“But as you see the numbers going down of advisers, those numbers can’t keep going down because eventually consumers are going to start suffering and our social security bill will get hammered. It won’t be now, it’ll be in 10 to 15 years’ time and I don’t think this government has an attitude of ‘I’ll let a future government worry about that’.”
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Could not agree more, that O Dwyer was a total disaster, but this giver had a chance to throw out some of here crap, and they did not, actually all they have done is act like little school boys yes sir no sir three bags full Mr Hayne, week as p… this liberal party .
Time to vote the lying incompetent liberal government out. Give them what they deserve!
Ah i think you will find Labor has created as many stupid RED TAPE REGS as Liberal.
Time to have some real people run the country rather than Lifetime Politicians that only know more REGS on top of MORE REGS.
The Pollies have lost any touch of reality and simply regulate us all to death.
I’m a risk adviser and I concur with Don Trapnell 100%. With the extension of the absolute nonsensical FARCE-IA exam deadline will be be staying to service my clients until Dec 2021, the date of the new deadline for all advisers to do this redundant and politically motivated ‘exam’ on ethics. [i]Pherleeease,[/i][i][/i] don’t start me on how it is impossible to filter bad advisers from the industry with this FARCE of an exam. I know that MANY others are very close to making this same decision – I know personally 9 risk advisers who already have and just from my circle alone there will ‘probably’ be at least another 10 poor souls who, like me, do not want to leave but are too old to invest the ridiculous dollars (doesn’t make sense or logic) it will take to stay PLUS who don’t do well under exam conditions. If these self-absorbed idiots who are driving us from the industry are going to make ANY concessions to older advisers who simply want to continue looking after their clients of 20, 30 years, then they better pull their bloody fingers our and make some sort of path for risk advisers because forcing us to do full financial planning degrees is beyond ludicrous and very destructive to the lives of advisers and clients alike. [b]Client best interest[/b][b][/b] . . . remember that quaint ol’ phrase?!
…and it’s such an easy solution. No exam if you have 20 years in the industry and are over 55! If you’ve been doing this career since before age 35 and you haven’t been kicked out then surely you have demonstrated ethics and knowledge.
why not let our fabulous AFA get amongst them and lick them to death.
In a few years time the government and ASIC will look back and realise the Life Insurance business has been decimated and they will want to turn back the clock because if they feel we have a insurance shortfall now just give it time they will realise they made a mistake and the insurance only advisers were on the whole doing a great job
Kinda like the UK where they had to implement 240% upfront comms to kick start the decimated Life Insurance industry after very similar reforms in the UK killed the industry.
Great to see our pollies learn from others mistakes – NOT !!!!!!!!!!!!!!!
I’m sorry Don but you are dead wrong on one major point. Every government and especially this one has an attitude of ‘I’ll let a future government worry about that’.” You just have to look at the main architect of this wreck, Ms O’Dwyer. She done the runner and is going to let others pick up the rotten mess left behind as usual.
OVER BLOODY COMPLICATED O’DWYER was without doubt an absolute disaster to Financial Advisers.
1) [b]LIF[/b][b][/b], a complete fabricated lie to allow Institutions to sell more JUNK Life Insurance direct to market. That went well didnt O’Dwyer.
2)[b] FARSEA[/b][b][/b], good intentions but moronic implimentation, just look at the initial approach that any degree older than 10 years counts for nothing so start again. Imagine every Dr, Lawyer, Engineer, etc being told to start uni again every 10 years. Freaking clowns.
3) [b]s.923 Independently Owned[/b][b][/b] – Bloody ODwyer yet again helping her Institutional buddies to make it even hard to be a non-institutionally owned adviser, the most restrictive term for Independently Owned Advisers in the world, again to help the Institutions and again that went well at the RC hey O’Dwyer.
4) [b]FARSEA Code Monitoring Bodies[/b][b][/b] – thats going well isn’t it O’Dwyer.
5) [b]Grandfathered Revenue Bans [/b][b][/b]- O’Dwyer yet again as initially the Institutions were going to be able to keep the Adviser revenue before she left and now at least it has to be made to reduce costs.
6) [b][b]ABP Caps[/b][b][/b] & the most ridiculously complicated changes to Super in 10 years[/b][b][/b] – and she announced it all with ZERO industry consultation. Remember the attempted lifetime limit of $500K NCC that was backdated to 2007. WTF was this clown thinking. And she had the audacity to respond to a letter i wrote and say it was retrospective legislation going back 10 years in time.
7) [b]CIPR Lifetime retirement product[/b][b][/b] – ODwyer and Treasury have developed are going to be some of the most complex products combined with seriously complications for estate planning and [b]they think these should be sold over the phone without advise.[/b][b][/b]
Great job LNP
Great job O’Dwyer.
Good on you Don – walking the talk yet again – thank you! Love what you say AND do. I’m not with Synchron but I respect you greatly.
They should not hold off. The government should add more regulation and push the remaining undecided advisors out of the industry. It will be short term pain for long term gain. People will need advice, and those remaining will have a larger pie of diminishing numbers.
Those remaining in the industry like me will continue as per the last 20 years to be swamped by the ever increasing utter BS Regs and RED TAPE STRANGULATION.
What a freaking mess of RED TAPE MADNESS the Governments have ALL made !!!!!!!!!!!!!
Unfortunately it appears few new advisors will be entering the system as the industry is yet to embrace the professional year. This can only exacerbate the problem.
Businesses already losing money on the back of changes to the industry haven’t yet seen the value as the short-term pain is high cost in training, education, supervision for somebody that isn’t in a position to generate revenue to offset those costs. In an increasingly costly industry to run a business, additional costs are not on the cards. It doesn’t help that the much planned and promised support from FASEA in the PY has, and unlikely will ever eventuate. It makes sense long-term to invest… nobody waking up to that fact though