In a new blog, Centurion Market Makers outlined predictions for the marketplace in 2021 and pinpointed education standards and FASEA.
“Education standards and the FASEA exam deadline during the year, will see an increase in advisers exiting and we expect some will be single owner businesses that will seek to sell,” the blog read.
“We expect enquiries in this respect to pick back up closer to the cut off date for non-university qualified advisers.
“We caution advisers in this position that a rush of books onto the market at a time where there will be far fewer buyers will attract lower prices and leave some advisers without a solution.
“A planned process to exit the industry is always preferable, and leaves advisers with more options than a rushed exit.”
Centurion’s comments come only a week after the chair of dealer group Synchron, Michael Harrison, said during a House of Representatives standing committee that FASEA’s lack of recognition of prior study is seeing older advisers move into mortgage broking.
“… they consider it less onerous, less regulated, they don’t have to worry and there’s no argument about where the commission is going to appear,” Mr Harrison said.
“I think that’s an issue. But I think also anyone over the age of about 55 who looks at going back to university to do a degree is saying ‘It’s all too hard, I’ll find another way.’”
Other views by Centurion included in the blog are that buyers are becoming “more discerning” and are “stratifying client bases when developing offers” and that grandfathered commissions have been eliminated since dropping off in late 2020.
fair call but poorly articulated. single adviser business – it will be a 200k exercise to cover off another degree. which having read through the training needs analysis is a total waste of time – neither an accounting degree nor a specialist FP degree are of any worthwhile merit. As a single adviser business – for most it will be five units of study – one full year caseload – On an opportunity cost basis, someone will need to be employed to cover off whilst the adviser studies – so wages, and the usual overheads – and loss of income to the adviser. So totally dumb. but you wouldn’t expect much else really. Its not designed to uplift competency standards or become a profession. Its single focus is to put otherwise competent businesses out of business. and on that measure, it should do just fine.
As a one man financial planning business with the required degrees I look at the large multi planner practices that don’t have the education and think to myself — I know where my clients in a few years are coming from. Simplistic puff piece by a bloke looking to get some more business.
Im a small business owner, fully qualified, not going anywhere. Small business owners are more likely to asapt to changing circumstances. Unlike big instos that throw the toys out of the cot as they cant use us as salespeople anymore.
I will run to 1/1/26 but at 59 and having been an adviser for 21 years i am not studying. I am resigned to writing off a loss on the book i purchased which will affect my retirement plans and my future voting and probably result in downsizing earlier than planned.. Thanks Scommo and Joshua.
5 years to go in the industry and you won’t study.
Do the maths….It will take 4-6 years to get the qual…
I wouldn’t either if I was them
Even if there is a drop in business values as lots of single planner practices head for the exits at the end of 2025, the owners will have had an extra 4 years of income in the interim compared to selling now for a higher multiple.
I suspect we’ll see a spike in exits at the Jan 2022 exam deadline, and again at the Jan 2026 education deadline, but very few in the years between.
It is quite weird. All brokers seem to say there is a big demand for perfect books. Great.
What about all the imperfect books? It seems most people are hanging on until the end of the year in the expectation that, since nobody is paying for them, they are better off just waiting and perhaps there will be a FASEA extension and accepting they get next to nothing.
That needn’t be the case. They can go to AFP Business Brokers, Radar, Centurion and others and test the market. We are buying and happy to take over at the end of the year.
no such thing as a perfect book. ASIC will always poke holes through it. it’s also the job of the prospective AR and AFSL to mitigate risk by identifying flaws to demonstrate they’ve done their DD.