In an opening address during a House of Representatives standing committee last week, Synchron director Don Trapnell noted that 6,500 advisers have left the sector in the last two years, while only 163 have joined in that period.
“Quite frankly, I’m not surprised,” Mr Trapnell told the committee.
“In fact I’m surprised that many actually joined. There’s no longer much incentive to come [be a] part of our industry.”
Mr Trapnell largely discussed the “over-regulation and over-taxation” in the sector during his address and called for urgent intervention, saying that it is at a “crossroads”.
He noted the recent ASIC levy – which saw costs to the advice sector increase by more than $16 million – and the government’s proposed compensation scheme of last resort (CSLR) – which would force the sector to pay over three-quarters of costs within the first year of the scheme – as examples as to why he believes the industry is under attack.
“Of the 70,500 AFCA complaints, 997, or 1.4 per cent involved advisers. Of the 997 complaints involving advisers 974 were settled, thus leaving only 23 unsettled complaints involving advisers. Unsettled complaints from the advice sector therefore represent 0.03 per cent of all AFCA complaints, yet this sector is to fund 75 per cent of the scheme,” Mr Trapnell said.
“There’s only one word for that, that’s disgraceful.
“In what other universe is this kind of penalty passed onto small business with so little justification?”
Good riddance to most of those that have left the industry. Most either left because they had already planned their retirement or had brought it forward because they did not want to work under the new regime (compliance and education standards) or the others simply weren’t up to the job. It was long overdue that a person with 2 weeks training could give retirement planning and tax advice because they had to meet a sales target to keep their job. They don’t belong in this industry. Let them go and don’t return to those days! If the advice industry didn’t want to reform itself within, and they had years of opportunities, then they can’t complain if a Government will do it for them. Let’s not revisit the past; let’s embrace the future! There’s more work to do to clean it up.
your criticism is not welcome. many older advisers who went through FSR, then FOFA and more and did their CPD hours etc, they are the good people. their knowledge is worth their weight in gold because of that knowledge wont be in the new degrees etc. The FASEA ethics are almost 100% identical to the accounting ethical standards. With one small difference. Any adviser that had multi disciplines had more education and knowledge than a financial adviser alone. I lost count of how many financial advisers I caught out, and banks, and accountants when auditing SMSF’s, so over the 30 years I think about 40 people have been reported to their professional bodies after lodging ACR’s to the ATO. You also referred it to an “industry” – mm . I though they wanted to call it a profession? The other problem of being in the financial services sector is that they advisers are up against robo advice and information is plenty full on the internet. I don’t know any one that did 2 weeks training since FSR (2002). Your information is fed from government workers and politicians – the Kelli O’dwyer era. sad, as it does not improve confidence of consumers.
Advisers must unite and treat Frydenberg like he has treated us for the last 8 years.
Advisers need to do everything possible to make work life a hard as possible for
Mr I Hate Advisers Frydenberg.
Out with Frydenberg !!!!!
Don let’s get rid of this turkey.
Hmmmm. I wonder who will gain out of this fiasco. I think you would only need one guess.
don, its an attack on the industry because someone wants it closed down. ..
Succinct Don. Banks and Unions are pulling all the strings and leaving independents to clean up their mess, with a government that is fully supporting the disgrace.
As an ex adviser who left several years ago I’m not surprised with the amount of those exiting, if your taking anything less that 200K a year (most are lucky to be taking half that after costs) home why would you do it? all that financial risk and cost your just 1 bad client complaint away from being sued, then there is the dodgy dealer groups and then ASIC doing an audit and finding a fault, nope… a lot of other less stressful ways of earning a living.
very true.
Come on Josh. You want to be PM one day. How about cutting through and improving the budget at the same time?
More ASIC employees does not mean more consumer benefit or some other intangible.
If it did, our ASIC levies would have already paid for the report which demonstrated such.
It is 2021, advisers are paid by their clients, not third parties. Clients know what they are paying for. Stop trying to implement redundant policy for circumstances that no longer exist.
We have almost got rid of vertical integration and achieved separation of product and advice to a large degree. Focus on keeping it that way. Don’t try and bring it back by default by getting rid of those who just provide advice to clients. Clients who are content to pay their adviser and can turn off he tap at will.
Well said Don.
Yes disgraceful. As well as the inordinate increase in government-driven outgoings the amount of stress caused would not be acceptable in Workplace Health and Safety in any other industry. Shame on the Federal Government.
Thank god we have Don in our corner, it seems to me he is the only real advocate left prepared to stand behind his beliefs. Love your work Don.
Let’s not forget the fact of what are we as Advisers, or consumers more importantly, actually getting as part of our funding of ASIC? Incompetence. Bias. Attacks. Over regulation. Ridiculous red tape. Hinderance to help. Obstacles to providing services. Inefficiencies. And of course a lot of documentation that clients and advisers don’t want and provide no help or protection to anyone either.
Anyone that is 60 years of age should not have to do any of the FASEA requirements. Anyone that has done part or the full Diploma of Financial Planning prior to 31 Dec 2019, should not have to be degree qualified. They be considered to have prior learning and those that need to complete the full Dip by 2026.
i agree.
What about if you are 59?
Absolutely right on the money Don. No basis for the impost and absolutely not an equitable situation.
Agree Don – it is disgraceful!!!
Where are you Frydenberg???
The Treasurer is busy working.
Josh is busy raising money from the big end of town for the next election!
He’s not busy working on his portfolio though is he.
On what? His post-politics role?
While he some points, joining our industry should be based on a passion to help people and do good in the world and not just financial reward. He should be talking about the need to make it easier to help people and the positive effects we have and not just bemoaning the higher costs. This might help us an industry get more cut through
Seriously you have to be joking, not much point in joining an industry that is continually smashed, abused and squeezed like a lemon to cough up the money, and advisors are entitled to be rewarded and make money for their efforts, how sweet of you to play the Love Card, but that doesn’t feed an advisors family, this is not an episode of Alice in Wonderland.
I agree but we need to make a profit so we stay in business to help people, bit hard given the slashing of insurance commission for no real reason, the overload of compliance requirements and the increase in ASIC regulations.
well aid Don
[i]“Of the 70,500 AFCA complaints, 997, or 1.4 per cent involved advisers. Of the 997 complaints involving advisers 974 were settled, thus leaving only 23 unsettled complaints involving advisers. Unsettled complaints from the advice sector therefore represent 0.03 per cent of all AFCA complaints, yet this sector is to fund 75 per cent of the scheme,” Mr Trapnell said.[/i]
Just waiting for the Liberal Troll to come out and explain this one away (you little grub!)
Labor if they get in next year are going to be worse unfortunately!
That’s the fear. Democracy is dead. LNP have fed directly into the hands of Labor and the unions.
Don’t kid yourself. Shorten was a good financial services minister and Labor were good for financial services compared to the current mob. A lot of traditional Coalition votes will be lost at the next election. Hume and Frydenberg are so dumb they don’t realise financial advisers are very significant influencers who have helped swing many votes their way over years past. Now that influence is reversing in a very big way.
Yes, they will be worse. However I prefer to know who my enemy is than be stabbed in the back by my so-called ally.
That’s not true at all. It is treh Liberals, and only the Liberals, who have implemented the massive new taxes (TPB registrations & ASIC tax) as well as all the red-tape.
I welcome Labor being in power. The Liberals stand for Big business, not small business.
TASA and FOFA were introduced by Bill Shorten. This mob have made things worse with LIF and FASEA. The next acronym will be RIP.