Last Wednesday, Minister for Financial Services Stephen Jones introduced Treasury Laws Amendment (2023 Measures No. 3) Bill 2023 to Parliament, which includes measures to recognise experienced financial advisers who pass the exam, have 10 years of experience, and a clean practice record.
In a speech to the House of Representatives on Wednesday, Mr Jones said: “By better recognising the experience of long-serving financial advisers, the government is providing a pathway for experienced advisers to remain in the industry.
“This means that new entrants have the benefit of their experience through mentoring, through supervision, and through employment. It also means that more Australians will have access to financial advice than would otherwise be the case.
“The government is committed to an advice industry with strong professional standards that give Australians access to high-quality financial advice and to do this by not creating unnecessary barriers to entry, ensuring financial advice remains a career of choice.”
Among the side effects of the move is a hit to the pocket of education providers, with the government noting in the bill’s explanatory memorandum that the cost to education providers will be the lost revenue from advisers no longer taking their courses.
“An upper estimate, assuming education providers pocket 100 per cent of their course fees, of this cost would be between $44 and $62 million … Education providers have operating costs, so the true cost will be lower than this,” it said.
“Education providers might lose revenue, but this policy is unlikely to place a large cost on them. The existing adviser cohort was finite so this as a revenue source was time limited, even without the election commitment.
“Additionally, the courses experienced advisers and new entrants must complete have overlap, so no upfront cost would have been spent developing courses specifically for experienced advisers.”
Association of Independently Owned Financial Professionals (AIOFP) executive director Peter Johnston has little sympathy for education providers and urged Parliament to ignore their revenue losses.
“We will only shed ‘crocodile tears’ for these organisations who took over FASEA after its inaugural CEO resigned when realising what its nefarious mantra was all about,” Mr Johnston said.
“FASEA became a highly conflicted and ethically compromised ‘ethical authority’ but survived to inflict unnecessary grief to many.”
Comparing the providers to Dracula being in charge of a blood bank, Mr Johnston added that there was a far greater cost to not introducing the pathway.
“Perhaps these providers can reflect on the 30 lives lost to suicide, 14,000 displaced advisers, billions taken in grandfathered revenue, and millions of orphaned consumers who advisers cannot afford to service before whinging about cash they should never have got in the first place,” he said.
“The FASEA entity and legislation was and is a disgrace and that’s why the entity was shut down (in name only unfortunately).
“This provider $50 million is speculative money whereas these adviser-related losses is real money that caused real mental health problems thanks to FASEA and its crony Life Insurance Framework legislation, another disaster unfolding before our very eyes.”
If you are suffering from depression, anxiety or suicidal thoughts, or you’re worried about someone else and feel that urgent professional support is needed, contact your local doctor or one of the 24/7 crisis agencies below:
Beyond Blue: 1300 22 4636 https://www.beyondblue.org.au/
Lifeline: 13 11 14 https://www.lifeline.org.au/
Suicide Call Back Service: 1300 659 467 www.suicidecallbackservice.org.au
FASEA was the biggest waste of resources ive seen in my 30 years in the indusyry.
Good comments by Peter Johnstone especially putting ‘Dracula in charge of the blood bank’ because that is exactly what they did.. too bad that I like many many others, in good faith believed the legislation paid the costs and pain, to complete our degree requirements.
These providers are a case study in vested interest groups acting unethically to pursue their own interests to the detriment of others. The very definition of ‘Conflict of Interest’.
Pravo Peter Johnston. Where was this talk at the time though. Very little way too late.