On Wednesday, FASEA released its proposed guidance on the exam advisers will have to pass in order to practice under the new adviser education standards regime, outlining five key competency areas advisers will be assessed on.
The industry associations’ initial responses to the document are mixed, with the FPA saying the proposal is “reasonably in line” with what the association expected, the AFA cautioning the proposed exam risks being too difficult, and the AIOFP wary that while the subjects seem appropriate, the underlying details will be key.
Speaking to ifa, FPA head of policy and government relations Ben Marshan said the proposed exam is not dissimilar from what the association would expect after its consultation with members earlier in the year.
“The proposal covers all the sections and areas we expect it to,” Mr Marshan said.
“It’s reasonably in line with the whitepaper we put together with members; it covers all the same areas and considerations, though not all of them at the same level.”
Mr Marshan added that the FPA has commenced its consultation with members regarding the FASEA proposal.
However, in response to ifa’s request for comment, AFA general manager of policy and professionalism Phil Anderson said the current proposal may lead to a sizable number of advisers departing the industry.
“We are still digesting the guidance but our initial view is that the FASEA proposal is positioned at a very difficult level and as a result, advisers will find the exam extremely challenging. This heightens our previously stated concern that it could lead to a mass exodus of experienced advisers from the financial advice profession,” he said.
“This would not only have a detrimental effect on those advisers, their staff and their businesses but also on the pool of mentors available for younger advisers, and on consumers, who would lose access to these highly experienced advisers and have fewer choices when it comes to engaging an adviser.
“We will consult with members as part of our upcoming roadshow and will make a submission to FASEA seeking a more pragmatic outcome.”
AIOFP executive director Peter Johnston said the exam should be designed by someone with client-facing adviser experience to guarantee the appropriateness of its content.
“We want to see a ‘coal face’ advice industry experienced expert setting the exam to ensure that only practical and relevant knowledge is examined. Prima facie the subject headings released seem appropriate but the devil will always be in the detail,” he said.
“We also wish to point out that product failure has caused the greatest harm to consumers over the past 12 years and advisers do not manage, regulate or approve them. We encourage the FASEA board to educate the politicians on this reality otherwise we will have highly educated advisers but products still failing.”
Yet more BS the industry has to contend with. I wonder if the bozos at FASEA have any inkling that advisers need to spend time helping their clients navigate their way through all the complex legislation the pollies have stitched together which affects their lives and try to make sense of it all so they have a financially secure future. Who has the time to wade through all of this FASEA nonsense. I’m not advocating that standards shouldn’t be raised…that’s very important. Unfortunately, the execution is sadly left wanting…typical of the Pollies and government agencies who have no idea how it works in the real world. The mail I have is that the FASEA board and educators recently met (almost in secret) and thrashed it all out…basically it’s a done deal and the so called “consultation process” is merely a window dressing exercise. Educators are now ecstatic because they can stick their collective snouts in the resulting massive fee trough…no conflicts there of course! What a sad joke this industry has become. The Liberal party are handling this like a bunch of red raggers. Minister O’Dwyer really has no idea. And as for the FASEA chair, Ms Walter, what a disgrace. I understand her secretive and erratic management style was one of the reasons the former CEO, Mr Sanders had to leave. So why aren’t all the associations kicking up more of a fuss about this malarkey? I now advocate that industry participants should rise up against this colossal overreach by FASEA. It beggars belief that they have been allowed to continue as they have without any checks and balances. Because O’Dwyer has no idea (and she can’t be trusted to tell the truth…exhibit A…her performance in the interview with the ABC’s Barrie Cassidy when asked about why they didn’t call the RC earlier), go to Corman or ScoMo and even Malcolm T. Although SME businesses are the natural heartland of the Liberal Party, if no one on “our” side of politics is listening, then hit the other side, Bowen, Short, Wong et al. Surely sanity must be allowed to prevail. If not, the Libs will be severely punished at the next election. PS: How will the Pollies position the additional costs of all this rubbish? Advisers cant absorb it, so it must be passed on to the end client. Listen & watch them all trot out, “it’s the revelations coming out of the RC that is forcing our hand”. What poppycock! The misdeeds of a few must not be allowed to set the agenda for all those great advisers out there.
[quote=Chris Craggs, Argurion Finance]Having watched clients (and family) go through the same issue, losing your mojo, I have some understanding of what you are going through. Before deciding to close shop I would recommend two things: 1. Look to partner with a larger firm-they should be happy to bring someone like you on, partner you with an undergraduate/graduate, your work would be more aligned to training and support with the aim to hand over to the client in due course, 2. Seek professional help. Losing your mojo is a symptom of bigger issues, particularly depression.
I wish you the very best, feel free to call if you want to have a chat (about anything, doesn’t need to be about business)[/quote]
Thank you, kind words and offer ?
Whilst I appreciate everybody’s concerns and the venting on these forums, the only way to effectively get attention to this over the top education proposal is to lobby your local member of parliament and highlight in a factual way how the proposed reforms will not better advice outcomes for clients. Politicians generally have no idea of how advice works and there is a general misunderstanding in Canberra that we all work for or are tied to the banks. It is proven beyond doubt that education/qualification/technical ability is not the cause of the industry issues. Incentivisation, vertical integration and product failure, coupled with a lack of effective regulatory supervision is at the heart of the issue and as a result, requiring existing advisers, many of which enjoy good relationships with clients and have successful businesses to prove they are good advisers by having to do an exam and bridging courses has absolutely no impact upon the objective the government is trying to achieve. I know from a close friend that is high up in APRA that the banks enjoy a very close relationship with both sides of government with the government not wanting to upset the banks and the FASEA proposals are a smokescreen for the government to try and look like they are cleaning up the wealth management industry with the advisers being the collateral damage as they are the easiest target. Speak up and meet with your local member of parliament before it is too late.
[quote=Anonymous]Let Deb set the exam. No one else on the FASEA board is qualified. [/quote]
We could do better!!
I agree with Peter Johnson (AIOFP) there are many advisers who have a wealth of industry experience in dealing with clients face-to-face and this should be recognised in exams and certification. Phil Anderson also makes a valid point; many of the degree-qualified graduates in the field have studied hard and have a good base but little client and ‘real world’ experience. I would like to know how the various qualifications offered by industry bodies (eg Kaplan) will be treated. Many planners have spent thousands of dollars studying these courses in order to keep abreast of changes and to improve their skills. Has this been a waste? Further, consider specialisation as a branch of financial planning. Many advisers have chosen a niche area and practised in that niche for some time. The result is that they do not deal with all aspects of Finanical Planning and a generalised exam will lead to these experts leaving the field.
The modified angoff method for developing the exam is amenable to having subject matter experts (including financial advisers) test and rate the exam questions for appropriateness and to reach a concensus. There are other methods too but this one is used more commonly.
Let Deb set the exam. No one else on the FASEA board is qualified.
The pollies cant even do a checklist to get into Goverment, failing with Dual Citizenship. So what would they be like with an EXAM……..?
How do we put an end to these endless attempts of making financial planning a profession by people who have never been in front of a client or by new advisers who assume that all advisers with more experience than them are shonky salespeople. If you want to be a professional act like it. If you need a title to prove you are a professional you are frankly not up to it.
[b]This test should only be on ethics nothing more this is the main thing that is being questioned at the moment and education we are already being forced to move our qualifications up to uni levels.[/b] why are we being double tested? looks like they want lots of financial planners to leave or be caught out by some questions that could go either way during a test….
[b]FASEA proposes a scaled passing score of 65%. [/b]in each subject in one test is a joke they don’t even do this at uni… they get an overall pass mark on a test. what a joke.
[b]Failure to pass the exam means you can’t be authorized to provide personal financial advice to clients.[/b] – Does this mean that after you fail you automatically lose your AR? Does this mean you go under the new adviser requirements straight away? so many concerns…..
What happens if you fail twice are you out for good? or does it mean you just have to enroll to subject ‘test’ again to have another go? like you would at uni?
An ethics test alone is not adequate for what this industry needs; competent advisers that genuinely know what they’re doing. The majority of my work as an adviser is damage control of poor advice from accountants and advisers with no formal financial training.
There are a number of University subjects you require a 75% pass mark for; some 90% plus. It depends on the subject at hand (yes some of these are finance subjects).
The proposal outlines you have 3 attempts; I recommend reading it.
Which university subjects require a 75% or 90% pass? I can imagine a Medical degree subject (e.g. anasthetics) as it involves life or death. Some subjects have a 75% class tutorial attendance record. I’ve completed 3 degrees (inc. MBA) and I can’t recall having to get a 75% or higher mark just to “pass”.
It also outlines that if you don’t pass the test you cannot provide advice until you have done so. Reading between the lines I would say if your AR is removed because you didn’t pass you would then come under the new rules for new advisers even if you are an adviser with 20+ years of experience. #2021 most planners out of a Job when most problems are with super and banking
these are the submissions to the Royal Commission looks like we have more problems with the banks then we do with financial planners.
Banking 66%
Financial advice 9%
Superannuation 10%
So we are to have an exam to examine our fitness to be in this industry despite a clean record of compliance, qualifications, courses as stipulated by regulators and industry bodies CPD points and now an exam to follow up with more courses. To do what. Clean up the industry ? As the Royal COmmission noted, its the edcuated ones, CEO’s and conflicts in financial institutions that are the damn problem along with incompetant government ministers and an equally dud regulator out to prove itself by picking on low hanging fruit instead of going after the head of the snake. After 35 years in this business and with 4 planners in our business and support staff, I am ready to say enough. I am sick of this industry and its fools running it. I am fed up of our stupid regulator who despite conutless collapeses costing investors a fortune, still remain stupid and now this nonsense whch will not solve a damn thing. Good luck with this. Now to tell the staff !!!!! Today is not a good day and it pains me as I know many have their own life issues.
It takes a certain type of adviser to put up with people complaining about negative investment returns, and to be blunt talking to stupid people who invest on the grounds of the latest headline in the media that month. That’s the real value of an ongoing relationship. So if the exam, education dosen’t get you then the cyclical market crash will always clean up the residual. After 20 years in the advice game I’ve guided clients safely through poor decisions, the GFC and all manner of market ups and downs. I don’t think I’d be around for another market fall and even though I’ve got a list of qualifications it’s just a nail in the coffin and I’m over being compared to a cowboy to be frank. In short Financial Planning is not a sexy industry to enter in the first place and it seems we’re working hard on getting rid of honest advisers.
We get compared to cowboys due to the horrendously low entry requirements and comical ‘CPD’ program that can be completed through ontrack in an hour each year.
Those with CFA are immediately respected as they have passed some extremely hard exams you cant fluke. Lawyers need to pass the BAR. We currently have some seriously average operators in the industry due to the low barriers, hence we get treated like it.
I think this would be a far more attractive industry to new entrants if they knew the bar was raised so they wouldnt be compared to cowboys/car salesman. Decent education standards and a better exam based on actual financial planning knowledge would help.
you are right. but why has the industry as a whole -with the exception of a few – vehemently protested raising the standards.
I have heard a handful of comments supporting the educational changes
why? do participants really think the education standard is sufficient right now
Its just all protecting self-interest. 70% of ‘experienced’ advisers dont have a degree, obviously they are going to lobby that they dont need one.
Unfortunately, part of shifting the industry from sales to actual advice is raising the bar. Raising the bar through exam and education, albeit frustrating, will get rid of some of the cowboys.
I have qualifications at graduate and post graduate levels and close to 20 years experience. We get compared to cowboys due to our relationships with Banks and products..not because of our education levels.. Get rid of this relationships with Banks, AMP and other product manufacturers and we’ll be profession over night. Our lack of education is an excuse used by Product manufacturers (CBA for example) and recently regulators to merely blame advisers and hide their sins. The majority of planners are ethical it’s at the higher level where poor behavior is…but planners working for these firms have been unwittingly brainwashed. Planners now need to take personal responsibility and accountability and walk away from these relationships.
If you want to reduce red tape and increase professionalism you should not be licensed by a product manufacturer.
yes, and wholesale rejection of the FPA and AFA
i call on all advisers to reject these two institutions
“We are still digesting the guidance but our initial view is that the FASEA proposal is positioned at a very difficult level and as a result, advisers will find the exam extremely challenging. This heightens our previously stated concern that it could lead to a mass exodus of experienced advisers from the financial advice profession,”
So they are saying a basic exam will be too challenging for the ‘experienced advisers’?
Probably says a lot about why an exam is needed.
It’s back to front. The exam content covers the bridging courses at uni level. We are doing the exam first without the course!!! All who pass should be exempt from the bridging courses. True we can cover ethics and Corp act and one other but there are two subjects in the exam we are expected to pass without any real direct textbook knowledge that will be required. Someone will make a killing writing an exam prep book if they are quick enough. Taxi driving looking good, no care and you can give all the advice you want without responsibility!!!!!
Chapter 7 – Financial services and markets 548 pages long mate
You go into a closed book exam you would be cooked mate. I would love to see you pass an exam or a FASEA employee pass the test for that matter? i’ll go to a random page and give you 6 similar choices that could all be the answer?
This is one
Division 2—Requirement to be licensed
791A Need for a licence what are the requirements?
this subject matter is dealer group stuff….
There is a growing cohort of individual AFSL holders these days…
Nah, you just study prior to the exam. They wont make it that difficult, they never do. All the masters exams were the same, if you either know what you are doing or study prior, you’ll be fine. Unless an exam is closed book, there is no point of it existing. Open book exams are just reading comprehension.
The focus of the exam does need to change to technical knowledge though.
I couldn’t disagree more. A good open book exam can be quite difficult. Do you claim to know absolutely everything? Maybe you could set the exam?
All professionals know when they smell an issue or need to check something in further detail. Be it a diagnosis, a point of law or a particularly tricky tax q.
Simply parroting information only indicates you are less useless still than a USB memory stick.
Proper assessments will be written, not multiple choice, to pick up nuances and give an indication on the comprehension of the question as well as the answer.
This of course would be hard to implement so we can guarantee it won’t happen.
Agreed; if you’ve ever sat a law, tax law, or financial accounting exam (open book), you’d understand how they are often MUCH harder than closed book exams.
Lol, open book exams harder than closed book. That’s hilarious.
Im not sure we as an industry could come up with more ridiculous excuses if we tried haha. Kinda funny, but definitely embarrassing.
[b]TECHNICAL INFORMATION v APPLIED KNOWLEDGE[/b]
Questions in a closed book exam tend to focus on pure technical knowledge. Black and White. That is just parroting information which can be found via a google search or on the AustLII or or DSS legal databases.
On the other hand, a good Open book exam will focus on comprehension of the technical knowledge and how it applies in specific circumstances.
Parroting technical knowledge is one thing. Knowing how to apply it, and when, is what makes the difference between an adviser and google search.
This is especially relevant as our job is to interpret and then apply the technical knowledge by comprehending the client’s [b]”best interests”.[/b]
courier truck, just enough to pay the bills and fill my time
yeah i think i will join manly ferries too that will be a nice change no paperwork shuffling nice way to retire and get my fitness back
Time for the advice industry to stand up to this nonsense. Close to the age of 60 and over 30 years practice I have to justify what for who? What other industry has to put up with this? Crooks will pass the tests so stop kidding everyone!
It is just ludicrous how is this going to help the industry? While we at it let’s go after Doctors, Lawyers, Real estate agents Mortgage Brokers the list is endless. Go tell a medico that after 20 years being a practitioner he/she has to go and do an ethics exam and if they fail they cannot work in their chosen field. Seriously folks time to take a stand and push back. How about we call for an exam for all our politicians? I for one have had enough being dictated to by clueless policy makers!!
Class action any one?
Seems a Class Action needs to be considered for sure. Have over 50 years selling Life Insurance and no
credit for past experience is offered. No common sense ! Stupid decision making !
I respect that you have been honest in saying your experience is in selling life insurance.
What the industry wants to do from now on is provide clients financial advice that may or may not include a product, not just sell life insurance.
That’s why the experience isn’t being credited. Its a different ball game.
Yet more BS the industry has to contend with. I wonder if the bozos at FASEA have any inkling that advisers need to spend time helping their clients navigate their way through all the complex legislation the pollies have stitched together which affects their lives and try to make sense of it all so they have a financially secure future. Who has the time to wade through all of this FASEA nonsense. I’m not advocating that standards shouldn’t be raised, that’s very important, but the execution is sadly left wanting…typical. The mail I have is that the FASEA board and educators recently met (almost in secret) and they thrashed it all out…basically it’s a done deal and the so called “consultation process” is merely a window dressing exercise. Educators are now ecstatic because they can stick their collective snouts in the resulting massive fee trough…no conflicts there of course! What a sad joke this industry has become. The Liberal party are handling this like a bunch of red raggers. Minister O’Dwyer really has no idea. And as for the FASEA chair, Ms Walter, what a disgrace. I understand her secretive and erratic management style was one of the reasons the former CEO, Mr Sanders had to leave. So why aren’t all the associations kicking up more of a fuss about this malarkey? I now advocate that industry participants should rise up against this colossal overreach by FASEA. It beggars belief that they have been allowed to continue as they have without any checks and balances. Because O’Dwyer has no idea (and she can’t be trusted to tell the truth…exhibit A…her performance in the interview with the ABC’s Barrie Cassidy when asked about why they didn’t call the RC earlier), go to Corman or ScoMo and even Malcolm T. Although SME businesses are the natural heartland of the Liberal Party, if no one on “our” side of politics is listening, then hit the other side, Bowen et al. Surely sanity must be allowed to prevail. If not, the Libs will be severely punished at the next election. PS: Listen & watch them all trot out, “it’s the revelations coming out of the RC that is forcing our hand”. Errant nonsense. The misdeeds of a few must not be allowed to set the agenda for all those great advisers out there.
The whole thing is a sham. My last 2 initial enquiries have been:
1) I put all my money in bitcoin, what risks are there associated with it?
2) I have 2 investment properties and want to gear those to the eyeballs to get more. How do I do so?
Luckily, a 55 page SoA, a new degree, almost unlimited PI liability, 3-4 hour exam, ASIC treating us as guilty until proven innocent, and the ongoing CPD requirements will guarantee that either client would pay me $3,000 plus for this advice I’m sure?
Just retired from the industry a couple of years ago at 64 and it was perfectly timed given recent events and the best move I have ever made. While I was fit and capable enough to keep going you just know when it is time to say enough is enough.
I am as busy as ever in retirement and keep fit and active.
If you have enough funds in super and other assets and own your home, my advice is to retire completely. You won’t regret it but find things to do, your own interests, maybe some charity work or whatever. You will fill your time up easily unless you are a deadhead!
At 55 I don’t think you will find work that is satisfying after being self employed.
Good luck!
Jelly, 35 here. God save us lol.
[quote=Leaving Planner]Hi Guys, seriously thinking of quiting, that is just shutting shop after referring them to the FPA. Small client base, 80k. 55 yrs old. CFP / DFP / etc.. all the various courses, CPDs etc.. just lost my mojo.
What career options are available, some help would be appreciated.[/quote]
I suspect their will be plenty of back office work for experienced advisers to help with like for like comparisons and strategy analysis to be done by a person with previous client facing experience rather than the clinical Paraplanner style which can often lack an understanding of real life constraints. Noli pati a scelestis opprimi
There will be plenty of Complaince work..come over to the darkside…Lol
There won’t be any compliance work when there are no more advisers to bully around! ASIC staff will be at the end of the dole queue
Whilst the intention seems to be reasonable the proposals remain unclear.
Which consumers are referred to in:
– Behavioural Finance: Client and consumer behaviour, engagement and decision making, and
– Financial Advice Construction – suitability of advice aligned to different consumer groups.
Advice for millennials is different to advice for people nearing retirement, which is different to risk only advice for business owners looking to cover debts, and so on.
Also, the proposed exam format of “Written response style questions” suggests that advisers will need to sit in an exam room environment, which seems unrealistic and out of date in a digital world.
FASEA announcement mentions RETURNING ADVISER’ – what does that ACTUALLY MEAN? Is there a difference between a “Returning Adviser” & an “EXISTING Adviser” as defined under Section 1546A of the CORPORATIONS ACT?
FASEA’s ANNOUNCEMENT yesterday mentions “Returning Advisers” as those who “Previously held registration as a Financial Adviser in Australia and are now intending to return to practice after more than 5 years without practicing,” Returning Advisers are “eligible to sit the examination” meaning they are not required to meet the ‘approved qualification’ hurdle.
Does this mean “Returning Adviser” = “Existing Adviser” under Section 1546A of the CORPORATIONS ACT which states an “existing (adviser)”:
(i) is a (existing adviser) at any time between 1 January 2016 and 1 January 2019 ; and
(ii) is not banned, disqualified or suspended…
If so, is there a POTENTIAL CONFLICT between the s1546A definition (anyone who was an Authorised Representative in the 3 YEAR period between 2016 to 2018)
&
yesterday’s announcement of anyone who has “Previously held registration as a Financial Adviser in Australia and are now intending to return to practice after more than 5 years without practicing,”
Hi Guys, seriously thinking of quiting, that is just shutting shop after referring them to the FPA. Small client base, 80k. 55 yrs old. CFP / DFP / etc.. all the various courses, CPDs etc.. just lost my mojo.
What career options are available, some help would be appreciated.
How about a Property “Adviser”, or Crypto-currency “expert”, or General Advice call centre worker – giving personal advice.
Don’t you mean a Property “Coach”, Cashflow/debt management “Coach” which all give “General Advice”. Crypto is just an IT person who can read a fictional “White Paper”.
Sad really, what a waste of all the years studying and now this.
I think I will drive a courier truck, just drop with parcel and move on, don not really want any interactions with people anymore after all the emotional baggage this professional inflicts on you because you care.
Good Luck everyone
Work for the industry union funds. That”s the intent of all this to get those pesky independent advisers out of the way! oops can I say that dirty word on here?
Industry funds? 12-15 appointments per week, FUM-flow leaderboards, below average CPD support, client book averaging 250-300 per adviser, and cookie-cutter compliance designed to keep you in line.
Good luck.
And for the record, I survived just fine (KPI wise), but decided to get out before it was too late.
Leaving planner, totally agree and completely hear you! I too lost all of my mojo and interest in this industry thanks to the FPA and it relentless course selling fee earning pursuit of growth of their own business. You can 100% blame the FPA for not supporting this industry and acting like the snitch in a concentration camp running to the nazis’ with ideas on how to punish the camp more.
Every advisor I know is leaving every advisor I know is banging their head against the wall in utter frustration on what they have to do just to give advice and earn a dollar.
All because of the FPA being the camp snitch for decades and abandoning its fellowship.
Being a member of the FPA and in many respects the AFA(who also let this happen by not attacking the snitch) is sleeping with the enemy. Most advisers have Stockholm syndrome I’m thinking.
But back to your career, it’s a mess. Like me I too just stare at my resume and think F this I have had enough of this complete and utter circus, I’m not doing it anymore.
Don’t worry, something will come up. There are many other jobs that utilise skills we have without the camp snitch sabotaging you along the way. Jump out, the water is not fine, it’s full of piss and shite from the FPA and it’s mindless members with Stockholm syndrome.
become a life coach / strategist
I’d become a consultant. There are least 5 for every adviser and we need more.
As for Referring clients to the FPA to find an adviser. How bizzare. As shown by the RC, they get funding by members who are accused of taking bribes,(NAB) charge dead people fees (CBA) and make false statements to ASIC (AMP). General members seem to be happy with this relationship, this deal with the Devil and seem to complicit with all of this behaviour. We’re still waiting for them to explain why it took 12 months to decide on the Sam Henderson case. Give that one a wide berth.
Yes, thanks. I just think to these people think that people are lining up for financial advice, so with the challenges now, hats off to those that survive and thrive.
Personally, I have do not enjoy this anymore. These changes were the icing on the cake.
Will find something with less stress and PI liability. LOL
Having watched clients (and family) go through the same issue, losing your mojo, I have some understanding of what you are going through. Before deciding to close shop I would recommend two things: 1. Look to partner with a larger firm-they should be happy to bring someone like you on, partner you with an undergraduate/graduate, your work would be more aligned to training and support with the aim to hand over to the client in due course, 2. Seek professional help. Losing your mojo is a symptom of bigger issues, particularly depression.
I wish you the very best, feel free to call if you want to have a chat (about anything, doesn’t need to be about business)