In a statement, the financial services training company said the consequences of a dramatic and sudden reduction in financial planner numbers will impact tens of thousands of clients and hundreds of small business owners.
Mentor Education founder and managing director Dr Mark Sinclair said, “Far too many planners have decided that the regulatory requirement for academic qualifications is a ‘line in the sand’ and their cue to turn their backs on a career and advice practices that have many more productive years ahead.”
Dr Sinclair said there is a significant vacuum of expertise in the provision of quality financial advice to meet the pre- and post-retirement needs of senior Australians.
“At a time when there is an overwhelming and growing need by mature age and senior Australian consumers to address the complexity of financial issues and longevity risks in retirement, experienced financial planners are choosing to exit the industry,” he said.
Dr Sinclair pointed to the need for solutions to address sequencing risk and issues; how to stretch nest eggs, superannuation and investments in retirement; exit strategies for SMEs; maximising social security entitlements; assistance and guidance to avoid scams, frauds and financial abuse; strategies to bridge the financial longevity gap, and more.
“It simply makes no sense when there is both a growing consumer demand and market for the services of experienced planners – as well as practical and workable alternatives to selling an advice practice at fire sale prices,” Dr Sinclair said.
Imagine if an adviser was found to have had tens of thousands of dollars worth of expenses paid for by a fund manager and didn’t disclose them. They’d be named and shamed by ASIC, cop a permanent banning order, cop a massive fine and maybe even jail time. But if your a Labor politician, you present a mea culpable, spend some time on the back bench and then straight back into it. The hypocrisy is gobsmacking but you would expect nothing less from these self serving grubs.
Yep, after 33 years I’ll call it a day in 2021. That’s the time, I believe, that the mere clerical academics running things say I have to be a college professor with all the degrees to help a client with term cover from then on. That reason and the [b]2 year clawback [/b]have done it for me. Not fazed about the commission reduction to 60% (and more to follow) – little impact on me personally but is a tragedy for new advisers entering the industry and for this the regulators and politicians and LIFE COMPANIES should hang heads in shame. They will have completely stuffed the [i]laughable [/i]phrase [i]’Client Best Interest’ [/i]by 2025 and no doubt the personal insurance industry by then too. Where’s the separate licence for risk writers incidentally? [b]STILL[/b][i][/i] nobody talking about this – just unbelievable! What the HELL are the life companies thinking in not getting THAT fixed up and lobbying for it. Oh, that’s right, they want advisers gone so they can bring commissions down to zero and have their robots sell their policies – ‘Client Best Interest’ and all of that . . . that’s when life companies will start to disappear, if not earlier.
why would any young person want to enter this industry. It is diabolical, disgraceful, dysfunctional. for those young people reading this leave! there are other more profitable industries to ply your trade in. at least, you do not have to suffer the mental anguish everyday.
a separate risk license would be smart. They need to stop pretending riskys are financial planners. The clawback just means the money for jam is going going gone. and so it should be. Churning insurance was a loop hole for businesses to make a lot $. It wasn’t a real service and therefore should be closed. On the same token, regulatory requirements and pressure should be lessened. As a compliance person, the fund of last resort, the new combined complaints regime (with zero recourse for the Adviser) means you pay too high a cost to be in this industry.
Provocative language from someone that doesn’t have to deal with the consequences of the ongoing grind stone that is financial services regulation. Advisers are leaving (young and old) because they are burning out. No one in the industry is addressing the huge mental health issues that are creeping up on people right now. Every PD day is some brash idiot jumping around about the fast rate of change or piling on the fear factor about doing the wrong thing. Honestly, I worry about my peers some times. They are not turning their backs. They are falling in a heap.
This situation is no different to young doctors harming themselves, it is an epidemic. What I fear most is a young adviser doing the same. I am not sure how a lot of advisers are withstanding the constant slandering everyday. I’ve had enough.
Yes, there may be many planners who leave the industry. But thanks to ASIC and the media, clients are being driven away from professional planners and are increasingly relying on property spruikers, junk insurance, and dodgy accountants for their financial future. It’s all very well to talk about the NEED for professional advice, but that’s irrelevant if clients don’t WANT it.
the whole industry undermines us, and it will come back to bite them. look at how the Australian Medical Association works on behalf of their member doctors. They could almost gas a patient (exaggerated of course for effect) several times and still work under supervision. A planner makes several innocuous administrative errors and they get a lifetime ban. this has got to stop! I don’t understand why we do not have a forum like the rebel CPA members have created for ourselves so we can join forces and fight this injustice. If we do not put a stop to this it will get worse. come on everybody, we really need a forum to collaborate and platform for our voice those who are supposedly representing our views are not doing a good job.
“The only thing necessary for the triumph of evil is for good men to do nothing.” Edmund Burke
John, I may be exaggerating here by using the term “evil” but I think you get my drift.
Issue I see is that a person (or group of like minded people) need to stand up and take the lead on this. Until there is a concerted effort then we will remain fragmented.
Time to put aside our differences between “independent”, “IFA”, “Salaried adviser”, blah blah blah…….. and unite as one industry.
I know others in the past have attempted to begin processes but for whatever reasons didn’t get anywhere and their attempts just fizzled out.
Until someone takes the lead, I’m afraid we’ll just be individuals or a group of individuals with no voice. We have some amazing and brilliant individuals in this industry. Let’s all start something.
Is there anyone that wants to take the lead on this?
It possibly fizzled out before because the advisers trusted the life companies to take the lead. Make no mistake, they are ‘one’ of the enemies. They want the adviser gone and the robots to do the selling. To be clear (and I am an old risky!) the life companies are no more than product creators and wholesalers – MINOR things in the advice process. WE as advisers are KEY. We simply use the life companies to supply product like we use and investment companies for managed funds – no more, no less. Perspective is needed here. We CANNOT EVER rely upon life companies to be our advocates with regulators and special interest groups. Like these entities, life companies want advisers GONE – OUT OF THE PICTURE. Have no illusions about this. As risk advisers we are trusting the wrong people. It sickens me how life coy execs will trot out the dribbling corporate-speak about how they are [b]”committed to the adviser distribution model” [/b][i][/i]and [b]”are PASSIONATE about supporting the adviser” [/b][i][/i]each PD day and expect us to lap it up. Time to create and adviser force consisting of 100% advisers (no AFSL’s either!). That is our ONLY hope.
you’re not wrong on your sentiments, but why should it be any different. Life coy are in business and carry a lot of risk. Advisers get paid very well for what they do – its a two way street and you want one way support. Advisers churn out of life coy at will. The only support advisers should get from Life coy is administrative and claim. Financial advice industry problems are their own.
Ah, couple of corrections are in order, methinks, Anonymous . . .
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1) we USED TO get “paid very well” – down to 60% now under new rules instead of 122% in some cases AND can under the new rules have it ripped back off us through no fault of our own for up to 2 years! This is simply NOT good enough to sustain most life or FP businesses now. Do you think life companies care? They are rubbing their greedy little hands in glee at our plight. They want the robots to sell their products ASAP. No more pesky commissions to have to pay advisers. You think I’m joking or exaggerating? Think again. We had NO support from life companies fighting the regulators over our pay cuts, indeed, life companies were in the drivers seat being complicit by their INACTION. If they’d supported and fought for us the outcome WOULD HAVE been completely different. They are powerful and got THEIR way with the regulators and pollies. Don’t talk to me about life company support of advisers, it is all window dressing, I’ve been around long enough to see and hear what happens behind the scenes and have it proven to me over and over again through over 3 decades. Do NOT try to tell me that life companies are “passionately committed to the adviser distribution channel” as their ‘execs’ sickeningly, repeatedly mumble at us every PD day and industry function to whomever is unlucky enough to be in earshot. Life companies are committed to ONE thing – their bottom line each quarter and financial year, end of story unfortunately.
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2) Your statement “advisers churn out of life company at will” leaves a lot to be desired. I thought you were better than to make a statement like that! We all know, LET ME BE CLEAR, that life companies CONDONE this behaviour or else it would have been cut off at the root WELL over a decade ago. Jordan Hawk was the only exec with the integrity, commitment and guts to try and do something about it and look where that got him. Nowhere. Churning is the practice of a bad SMALL minority so the poor bleeding heart you have for the life companies has been slashed by those very life companies you say carry the big risk! I take offence that you make it sound as if it a common thing for good advisers to do, churning. Life company’s ‘risk’ is exacerbated by their behaviour around allowing churning. Yes – they are the ONLY ones capable of stopping it and it could and should be done tomorrow! Wonder why they don’t stop it, eh?! Are they happy with the mileage it gives the ‘bad boy adviser’ story publicly so it is easier to dump advisers fully when the time is right? Or is it the extra business they perceive they get through churning (surely a furpy). Maybe we’ll never know for sure. Moot point now anyway the way things are panning out. they’ve been very successful in all this, the life companies.
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3) You state “Financial advice industry problems are their own” (the advisers). What abject poppycock! I reject outright your assertion that advisers are more complicit in the current industry woes than life companies. You MUST be a life company exec to state that absolute corporate self-serving dribble. If you consider yourself to be a viable part of this industry you should be ashamed of yourself for holding those sentiments. Sentiments are thoughts and thoughts lead to action so no doubt you’ve been active against advisers in one shape or form. You should be disgusted with yourself – there’s no place in our industry for life company shills.
The Doctor was probably rubbing his hand with glee at the money he thought Mentor would make but has just realised that nobody is signing up.
Simple Doc. Its not just the education standards, its because there is a genuine perception from those that don’t that advisers can work for free. Increased regulation, increased costs and reduced income add up to one simple thing. Best to get out, retire early, sell up, do something else. Yes we agree this is terrible for consumers but its self serving lobbyist like you, the FSC, instos etc that have brought this on.
I agree with many of the comments here. Red tape, the constant & significant risk of working in this industry and now financial advice is only available to the few is a problem. However a Graduate Diploma in Financial Planning costs $8,000 and can be completed over 2 years or more and should meet the requirements of degree “”or equivalent””. Whilst being at a Graduate level, there are usually concessions granted for life experience.A small price to pay to lift entry standards, where entry standards are lower than that of a hair dresser. Whilst ever this is the case we are easy targets. There are many advisers out there with only a DFP1-4 and this lack of self regulation and leaving our destiny in the hands of fund managers and the FPA is coming to back to bite us all.It’s up to you if you want to operate at minimum levels and be subject to Government regulations myself I chose to operate at a higher level.
Very Well. and, I have thought like you, and in the process completed two masters degrees and a couple of Graduate Diplomas while working full time and raising a young family. That said, how does that protect me still, using the words of others who have already commented.
1. [b]A[/b] “crazy vexatious consumer” one of whom can put my whole career at risk
2. there is no back up for IFA’s
3. hostility of the regulator
4. not sufficient reward for the risk taken
5. havoc on our mental well being (and those of our innocent family members) for constant slandering by the media and regulator
6. being blamed for product failures
so there is no protection for me as an adviser, I can be used and dispensed, no thanks, I refused to accept these terms. good luck to those who remain
how do we collectively advance our grievances? Who will listen? our reputations have been so badly tarnished that we haven’t got any recourse. I wish we could go to a credible media outlet and plead our case. It’s so unfair. I am in utter despair.
fair call on no. 1. I have seen one AR have 5 vexatious complaints (orchestrated by the one accountant). I always knew it was a avenue someone could use FOS to ruin a small business. $30k in FOS fees without doing anything wrong (that is if one t or I is not out of place).,..plus countless hours defending each case.
I’m an experienced long term and multi-award winning adviser and I’m sick of the amount of crap we put up with in this industry. All it takes is one crazy vexatious consumer and your whole career can be called into question. There’s no back up for IFAs from those proxy regulator wankers at the FPA who are a front for insto’s – the AFA seems to go into bat for us – but nevertheless it’s No wonder advisers are leaving in droves. It’s a sad state of affairs. My trusted clients hate the regime more than me and roll their eyes at the ridiculous levels of disclosure. I agree protection is needed and disclosure is important but this nanny state has gone too far!
I have a double degree BTW and post grads to match, and I’m fee for service. I don’t really care how other advisers charge nor do most of their clients so long as the do a good job!
I could not have said it any better myself, well done. Thank You. There are many like you, including me who share your sentiments and who are on the way out. With two masters degrees and substantial business experience, my qualifications are portable and useful in any industry. Good luck to those who remain.
It’s not the educational requirements that are driving the exodus.
It’s the hostility of the regulator to the advisors and the over focus on how much an advisor charges – not earns rather than consumer outcomes that drives people from this business.
Compliance burdens, costs, defamatory and derogatory treatment & press all encourage academically qualified & experienced advisors and potential candidates to select another profession.
Law is an easier path, accounting is a good clock, real estate is a great money earner for limited training and experience. All are more attractive than this field.
Weird comments from someone trying to attract our business. But Dr Sinclair is wrong if he thinks it is only experienced advisers who are considering exiting. Young advisers are also on the way out. If he engaged with financial planners, he would find very few of us would recommend this profession to our kids these days. Which is not a good sign. The stress, risks, lack of job satisfaction due to excessive red-tape, relatively low incomes, demoralising slander from the media and our regulator, possibility of being blamed and banned if a product fails…. It’s sad to say all this because I am passionate about financial advice and I will be one of the ones that battles through it. But for those who choose to leave, I think we should give them some respect and thank them for their service rather than kicking them in the bum as they walk out the door.
The bar to enter the industry has been too low for far too long. If any adviser now thinks that having to have improved formal qualifications is too onerous then perhaps it’s best they leave the industry. And given that average, and worse, advisers have been earning far too much for far too long the long overcharged and deliberately and tactically confused clients have a right to expect more.
The financial planning industry has a noble cause to meet and it is valuable to the public but it is not rocket science and has overvalued itself for too long. The “excessive red tape” is needed, the incomes are only being brought to market rates, the slander has been self inflicted ( not by all but some and certainly by greedy product manufacturers and a cottage industry environment ).
The industry is just going through a much needed transition and what comes out the other side will be a more reliable, trustworthy and valuable service.
None of my comments are direct at or should reflect on many of the excellent qualified, client focussed and professional advisers that are battling to stand out from the masses.
But I do agree Ben that the Doctor must be seeing an increased pressure on attracting business.
You do not understand the value clients place on a trusted adviser to guide them through a volatile investment environment and erratic legislative framework.
I’m sorry but I think I’ll ignore the comments from a conflicted party who is only upset because retiring or exiting advisers won’t be doing his companies overpriced courses that provide no benefit for advisers or their clients. If Dr Sinclair was genuinely worried about the outcome for clients, how about reducing the cost of his courses, or doing something other than blaming advisers who simply choose to retire or exit? I know advisers get blamed for everything these days but this takes the cake.
Every single planner I know is exiting the industry including myself. It is just not worth the time, risk and effort. It is teeth grinding anger that I view the educational debate nonsense that the FPA has successfully managed to hoodwink and lie to the clueless government bodies which seriously does nothing to help this industry over and above what an adfp or cfp does not do already. I and all of these advisers have more knowledge and experience than you could ever learn from a degree or course. You can’t buy a degree in ethics or morals and that is all that was missing from every bad case of clients losing money or getting ripped off. Nothing to do with education standards. If I had the time and desire I would fight this with a class action against the industry and expose the FPA for what it really is doing and reverse this pathetic cash grab they have strategically planned for a decade or more.
It would be better if the education reforms weren’t retrospective on existing advisers. It makes little sense for experienced advisers to attain a degree standard qualification in the latter stages of their career. The new standards should only apply to new advisers entering the industry. There would then be a natural transition over time where all advisers will eventually be under the new standards. Some common sense from the bureaucrats would be a welcome change.
Wow , that actually makes sense !!!!
Summed it up pretty well , but a degree is the only thing ASIC wants . You can’t have a “Profession” unless you have that bit of paper that academics with little or no experience teach you …. or can you ? Oh there also is the whopping HECS debt also indexed up each year to cost you more . Lets get real and forget this degree crap !!! I say