Responding to research house CoreData’s adviser retirement projections, associate professor Adrian Raftery of Deakin University took to LinkedIn to argue that a significant portion of the industry will likely exit rather than up-skill.
“Of course they are leaving the industry,” the academic said.
“Every conference I go to they say ‘my retirement date is 32 Dec 2023’. The thing I disagree with [is the estimate that] 16 per cent [will leave], as my estimates have it closer to 21-34 per cent.”
The comments follow CoreData’s research that indicated 16.5 per cent of respondents to its survey would rather change careers than comply with the new minimum standards.
The majority of respondents (68.1 per cent) said they intend to meet the requirements, while 15.4 per cent said they are “still unsure what is required … to meet the new requirements”.
CoreData customer experience and offer manager Sean Allen, a former manager with NAB- and Westpac-aligned dealer groups, said the exit of such a large number of advisers would have flow-on effects for investors and the broader financial services industry.
“Have we considered the implications for the consumer who overcame their own weight in apathy and actually took the plunge and engaged the services of a financial planner?” Mr Allen asked.
“Will they become the fodder of an ‘orphan list’ packed into the bottom of a brown cardboard box locked away in some far away storage document stronghold as licensees struggle to deal with abandoned businesses?
“What then are the possible implications for the many ‘product manufacturers? Will they see the ‘best advice’ ruler being run over their old, ageing, costly and out of date (but very profitable) legacy policies? Will they now need to re-consider the hot potato of automatically upgrading customers and engaging them with meaningful advice?”
Mr Allen also said advisers looking to get out of the industry need to ensure they have an exit plan and to start preparing now.
I do hold a Bachelor’s degree in Financial Planning however still needed to do TASA and am fine with that.
Whats the harm? education will only make us stronger mentally.
I have also positioned myself to be ready for the industry exam. Bring it on.
So ladies and gents, don’t be scared, there are many institutions which will provide you with credits for your existing qualifications and experience and you mightn not need to do full 3 years of degree. Have your qualification assessed and could be lot lesser of education.
REMEMBER, once the education and exam is passed then it will again be a cruisy ride as you have crossed the bar.
good luck and don’t be scared with education. half the time, you would already know the materials as you have already practiced it.
Well said, a good positive sentiment. I have taken the same approach.
The best defence is a good offence and I certainly won’t allow industry super funds, banks and accountants to step-in and ‘fill the void’, so I’ll be staying. I’m just going to close down my expensive office, deleverage, and run my practice on a laptop (from home). From there I’ll invest in the best technology and tweak my value proposition (remaining extremely profitable in the process). I’m excited about the possibilities – this is an opportunity to think and act differently. Bring it on.
I just wonder if ASIC and the FSC etc. knew how much turmoil and upheaval their interference ‘would’ cause (and has caused reading the above comments) when they systematically set about infecting this industry with their cancerous touch several years ago?
I deal with my own uncertain future demons on a daily basis now thanks to these despicable, conflicted bodies – it seems quite clear that I’m not alone.
Well done ASIC, banks and FSC. You’ve thrown an incredibly valuable industry into absolute and utter chaos.
Stop whinging on here, get off your backsides and campaign to your local members. Is it not unconstitutional to prevent someone from earning an income? I have a Business degree completed in ’08 and an ADFP, chances are I’ll have to tuck into a few more texts over the next 10 years but I’m OK with that. If it’s a full blown 3 year Bachelor of FP that I need to do then I’ll sell my business. Having hired grads from that course I can say that it’s a junk degree
I have all the relevant qualifications and I’m still leaving. Masters in FP, ADFP, CFP. as well as TASA, SMSF & Margin lending accreditations.
The reason, compliance.
I’m now a life coach with no AR, dealer group, no worries. I dont give any product advice or personal fianncial advice, just great tips and tricks from a well educated life coach.
I failed to see how I was put through the ringer with all of those qualificaions, experience and knowledge while Johnny down the road with no experiecne can tell you whatever he likes.
Now instead of focusing on compliance to keep audit happy, I focus on my clients and giving them the time, energy and knowledge they’re looking for.
All for half the price due to lower overheads… Get on board guys, the grass is greener
So this is our industry. Folks leaving or thinking about leaving. Please stay the course and meet with other advisers and discuss your future openly with all. I agree we have been let down by the our associations, government, regulators like ASIC. . As Australians, we seem to be those who are fast becoming a nation of onlookers. We get bullied by those who are supposed to be looking after all stakeholders including consumers only to arrive at a solution largely based on ideology and the other obvious motive. Greed. I was this morning at a cafe having a breakfast and was asked to pay before my order was completed. I asked is this usual for your business as I frequent there often. Only recently was the reply. Apparently, they get a lot of “runners”. When pressed further, I was told, it was mostly elderly that were the concern. We as a society have allowed this to occur. Retirement planning is vital. Yet government has made life harder for those in this country that have devoted their lives to it and for the incompetence in government, no reform in sight, waste of taxpayers money, our elderly suffer. Our associations are quiet.
.Superannuation changes, age pension changes, high cost of housing, housing affordability, mortgage stress, under insurance. All of these concerns are real and occurring to our clients. The answer is simple. Kick our industry, its advisers in the pursuit of political ideology and greed. Our associations are quiet.
Tax reform, social security reform, business reform, the loss of our car industry,a property bubble looming given the false promise of wealth with lower interest rates. Our associations are quiet.
So this is our industry and nation. Vision less, heartless and for the Aussie battler gutless as well.
Shame FPA, AFA,….shame on you all. Hang in there guys. Your knowledge, talent and valued experience is needed by your clients. We as advisers need an association that acts for all including the most valued, the humble consumer. The times may be changing but to what is what I ask ?
[quote=Anonymous]The phone is ringing again, someone with no qualifications, no experience and unlicensed, is trying to sell me a home loan to buy an investment property otherwise I won’t be able to retire because i don’t have $1.7 Million in savings. [/quote]
Ah, you had that call too! If they call again, just tell them you are over 60 – they will actually hang up on you – as happended to me last Friday.
I’m 59 and relatively highly qualified including a business honours degree, DFP, CFP, AEPS and Registered Life Planner. It all adds up to at least 9 years of study. I can honestly say that I have never studied anything that didn’t end up in one or more of [u]more confidence, better service or more fees[/u]. I’m happy to study again because I’m not going anywhere for another 10 to 20 years and I want to be the best I can be.
For those of you contemplating leaving…we need you guys. Hang in there because this will be the greatest and most valuable of all professions. But if you really have had enough, I’d love to discuss how best to look after your clients whilst retaining your reputation when you leave. If the market corrects between now and your proposed retirement date, you may be in a far worse situation. [b]Justin Hooper: Sentinel Wealth[/b][i][/i]
Nice work Justine, I agree the education requirements are needed and I have done plenty myself, Economics & Business Law Degree, ADFP, SMSF Specialist, AEPS, etc and always learnt something worthy.
Maybe a little opportunistic to be looking to buy a few client books but also smart business for those that stay. Cheers
The FPA does NOT dictate qualifications or further education, we have a new entity formulating what is required. As for those with DFP and advanced DFP and degrees or masters, it may well be only one or two bridging courses. Many are in the same boat and a very simple answer may well appear sooner than later. Additional degrees- Not likely but let’s see.
The average age of an adviser has been a concern for a long period of time and the new educational requirements are an additional burden, much the same as the accountant and the SMSF.
The business model is all wrong, and getting worse.
My view is simply this, the financial advice disruption will make Uber look like a choir boy.
The bodies representing us need to toughen up with the government and tell them enough is enough and if you want a mass exit of planners with over two decades of experience with qualifications but not enough to meet your criteria then please continue. The FPA should be fighting a lot more as there would be a lot of planners like we who did the DFP (8 subjects) finishing in 2003 and were given the CFP because of there experience. Now please remember this was something that the FPA did not us and now it means nothing. DO SOMETHING FOR YOUR MEMBERS.
Hi Anon, they are representing their members full and well. Majority of their members work within and are large institutions, so they are advancing their member’s concerns accordingly. I know that doesn’t sit well with IFA’s and consumers but hey, that’s not their problem. Think about who their paymasters are please
The FPA is doing quite a lot for grandfathered CFPs actually. It is allowing them to masquerade under a professional designation, even though they have not met a fraction of the requirements that most consumers would expect from a professional. The FPA is deliberately obfuscating and blurring the differences between real and grandfathered CFPs, so that consumers and regulators have no way of telling the difference.
The cost of this enormous favour the FPA is doing for grandfathered CFPs is a loss of credibility and influence with policymakers. It means that real CFPs (those who have completed a degree and postgraduate study and a rigorous financial planning exam) will have to do a similar exam all over again. The FPA’s misplaced loyalty to grandfathered CFPs has ultimately betrayed consumers, and the majority of the FPA’s members.
With FPA board elections coming up let’s hope candidates declare whether they are real or grandfathered CFPs, so that members can make a properly informed choice when voting.
If the legacy CFP issue (less than a fifth of all CFP and decreasing) is the biggest issue on your mind then you’re a long way behind the game
What a crock! So you are trying to rationalise that someone who sat through more theoretical exams, or read more books, or has a couple of extra pieces of paper on a wall will provide better advice than someone who has first hand experience and knowledge garnered over 20+ years in a successful business?
I have all the relevant qualifications and several degrees, so this doesn’t affect me, however I have listened to ‘educated morons’ oft enough to know the difference between their theory and reality is extremely different.
Love to drop your idiotic arse way out in the bush with someone who has several degrees in theoretic bush craft & survival to see how long you would last; me, I’ll take the guy with less paper ‘qualifications’ but who has been living it daily for 20 years.
If you think grandfathered CFP’s are a problem, then you are a large part of the truly uneducated problem tearing this profession apart. Grow up and wake up to yourself son, and stop being so ignorant in your approach and attitude to life.
For such a supposed non issue it is remarkable what a rapid and aggressive response it has provoked. Sensitive topic it seems.
I wonder how 16-31% turnover rate compares to other industries:
Retail Sales – 67%
Sales – 66%
Food Service – 62.6%
IT – across the top 20 IT firms in the U.S average tenure is less than 18-months
Nurses – 43% (leave within 3-years; 18% leave within 12-months)
Hospitality – 34%
Childcare – 31%
Whether it’s 16% or 31%, I’d say that sounds about right.
I’d also say that the main reason advisers will leave is not because of mandated university qualifications requirements (I just can’t bring myself to call it ‘education’), but the twin tsunami’s of compressed returns and technology. Vast numbers of planners have no genuine value proposition, which leaves their clients no option but to ‘benchmark’ their performance to product returns. And vast numbers are so hopelessly behind the 8-ball when it comes to implementing new technologies it’s unlikely they will ever catch up.
Your statistics are out of context. If 100 nurses enter the industry in Year 1 and 43 leave by year 3 than yes that’s 43% that leave. that’s what you’re saying. Of the 100,000 or whatever number of nurses in Australia I’m pretty sure 43,000 didn’t leave last year. we’re talking about 30% of existing advisers that will never ever again enter and as a whole. We’re not talking about the 100 new people into the retail sector that leave Coles and work at Big W next week. As far as trying to implement new technologies most are ham strung by 1) dealer groups or 2) Software programs where there biggest client are product manufacturers like AMP and are not going to change there systems for a lone adviser.
ASIC don’t care, as they think the gap will be filled by accountants. Whilst the majority of accountants don’t even have an Advanced Certificate in number crunching, there are 180,000 of them giving unlicensed advice now, and so the small percentage with degrees that will get a limited license will fill the gap and offer “”strategic advice”” you’ll then be able to buy the product from the banks and industry super. It’s a very flawed model and we’re not doing anything about that thinking. Advisers are being legislated out of existence, a no winnable best interest obligation, Financial adviser levies, red tape and compliance. It’s a tough gig.
The phone is ringing again, someone with no qualifications, no experience and unlicensed, is trying to sell me a home loan to buy an investment property otherwise I won’t be able to retire because i don’t have $1.7 Million in savings. No adherance to anti hawking legislation, no requirement to provide consumer protection documents, no access or requirement to have a dispute resolution process. No claim to PI insurance. Yet sign me up. ASIC would be better off widening their powers and getting rid of these guys prior to getting rid of the actual licensed ones.
I am leaving, invested soo much but now just cannot handle lower revenue and stress of clients not engaging and compliance headaches and changing goalposts.
I’m leaving. I have DFP and ADFP and 20 years experience but I’m a risk adviser. On top of the new qualifications I have to deal with a 50% pay cut thanks to a crooked FSC. As usual there doesn’t seem to have been any thought given to experience and advisers who choose to specialise. As well as the time and cost it would take to reach the new qualifications, they would be a total waste of time for me and my customers.
[quote=Anonymous]I’m 33 and I’ll be leaving the industry. I have a masters degree in finance, on top of a bachelors, the DFP and ADFP, plus all accreditations, and the FPA said that their belief is I’ll need to do another degree or 2 years’ bridging courses.
I can’t see consumers paying more for advice due to an extra piece of paper and education levels held. [/quote]Why.. you are over qualified?
Most likely because his degree is too old. He is being punished because he tried to lift education standards in the 90’s by being a leader and getting a degree, but as his degree dosen’t cover GST or the tax practitioners code of ethics established in 2009 it may not cross the line of being relevant. He may likely need to a bridging course, perhaps the final nail in the coffin. We are still awaiting details however but the people who are deciding our fate sell education courses for a living so you can guess what the outcome will be regardless of how many degrees you have. A bridging course from Griffith Uni for all.
hit the nail on the head. Also, did my ADFP via Kaplan and my business law course via Kaplan, whom have said the TPB won’t accept their courses. Instead, Kaplan is happy to sell me 2 more courses that I’ve already done, albeit 3-5 years ago.
Well who else is going to provide adviser education…Kellogs!
What was the intention of these changes? Ah yes, better advice for consumers. If these figures are close to correct, then the idea that more Australians will receive good advice has just been forecast to be wrong. If the powers that be did not forecast, or at least consider, such an outcome in an industry with a high average age then woe on them. As you sow, so shall you reap has never been truer! What about the consumer from 2021 onwards – because not all who sit the exam will pass, not just post 2023…maybe some un-common sense will prevail in the ensuing years.
Doubt there will a surplus of un-common sense Patriot any time soon. With Shorten looking a dead cert for the Lodge, and a royal commission following soon after, expect more changes not less. The only good financial planner is one employed by the Union Super Funds. All the rest are vermin that need to be exterminated. Only when all super money is held inside Union Super will Labor be happy. That’s when the gravy train of money to their masters in the Union movement will be complete. Shorten has made it pretty clear that he will stop the ability of people to establish an SMSF with a view to borrowing money, as this will reduce the flow of people with larger account balances leaving Union Super. Of course he hasnt said as much, he’s hiding behind a recommendation from David Murray, and using that as cover for the favour to his mates. #UnionsArentSuper
The Libs agenda is property speculation and junk insurance. Labor’s agenda is union super funds. Medcraft’s agenda is generating more conflicted revenue for his accountant friends. Zinn’s agenda is making personal profit out of trashing financial planners. Ferguson’s agenda is generating sensationalist media content out of trashing financial planners.
Let’s not kid ourselves. Not one person in a position of power or influence in Australia has any interest whatsoever in better advice for consumers.
I’m 33 and I’ll be leaving the industry. I have a masters degree in finance, on top of a bachelors, the DFP and ADFP, plus all accreditations, and the FPA said that their belief is I’ll need to do another degree or 2 years’ bridging courses.
I can’t see consumers paying more for advice due to an extra piece of paper and education levels held.
I agree, I have the same qualifications as anonymous and have been told the same thing, the rub is, that I am so more qualified than the corporates making the decisions.
It is comical…
Equally comical Stephen is that any person could have been in the Industry for a decade before any FP qualifications appeared on their CV
Not to mention the politicians (Lamby comes to mind) or even ASIC. I mean, what qualifications does the average ASIC or even Government employee even have, to be able to make these decisions? Let’s face it, they didn’t even realise they should have further researched the impact and numbers involved in ‘churn’ before pushing through changes – clearly they’re uneducated or moronic.
This whole thing is a Labor/ISA beat up with other vested self interest groups like the FPA quietly happy as they mistakenly believe it will be more revenue for them. Pretty sure when more of us have to do a Masters, that the ‘value’ of having a CFP will disappear and huge numbers will rightly drop out of the FPA who does bugger all for their members.
I’m leaving, and doing so about 4 years ahead of schedule, in my case i am still retaining ownership, and selling / accessioning down my equity over time. it has been a difficult few years, but we will (I think) be ok in the long term.
Those were folks who AGREED to participate in the survey?
Not sure I would begin an Industry analysis on what a few people said at Conferences. It’s unlikely to be that big a percentage to leave, a lot have already gone and there is currently growth in newly qualified Advisers and Professional memberships. Probably another 10 or 15% to go but some AFSL number reductions will be more lumpy than others I would guess.
The people who have the time and money to go to conferences are more likely to be the ones who can afford to retire early. Not a representative sample.