In a column prepared for ifa magazine, Synchron director Don Trapnell asks a rhetorical question: Are the education requirements currently under consideration being drafted to ensure that life insurance advisers fail?
“It’s difficult to think otherwise when specialist risk advisers will likely be required to sit the same exam as financial planners, despite the two being quite different disciplines,” he said.
“It’s difficult to think otherwise when the proposed exam is four hours long, when it’s closed book, when, if you fail it three times, you’re out. But most of all, it’s difficult to think otherwise when 30 per cent of the exam will be on Chapter 7 of the Corporations Act. Chapter 7 outlines financial services and markets, is 500 or more pages long and includes many sections which are not relevant to the day-to-day work undertaken by risk advisers.”
In defence of risk advisers, Mr Trapnell said that no amount of “irrelevant further education” changes the way life insurance advice should be delivered to Australians – “and that is, giving people advice that considers their specific risk insurance needs and protecting them and their families against life’s uncertainties”.
He pointed to data from the May 2018 APRA and ASIC joint release on new life claims, which found that 98 per cent of all death claims on individual advised policies were paid out, whereas only 88 per cent of individual non-advised policies were paid out.
For TPD claims the discrepancy is greater: 86 per cent of individually advised policy claims were met as opposed to 67 per cent of individual non-advised policies.
“If not for these advisers, even people who are the beneficiaries of life insurance might not be paid the claims they are entitled to because they don’t know how to make a claim, or, in their hour of need, they don’t have the resilience to persist with a rightful claim if it’s contested by a life insurer. If not for risk advisers, there would be an even greater social security debt, an even greater burden on other Australians,” Mr Trapnell said.
But in the face of ongoing uncertainty and unreasonable demands, the Synchron boss believes many professionals who have been delivering great risk advice for many years and have secured great outcomes for their clients will throw up their hands.
“They think it will all be too hard. They will listen to the doomsayers and believe risk advisers will become extinct, wiped out by excessive education requirements and overzealous regulation. But we must also be very aware of self-fulfilling prophecies,” he said.
“Let’s not engage in rhetoric that sends us to our doom, let’s continue to operate and let’s continue to deliver great service to the people of Australia, despite the prevailing conditions. And instead of living our professional lives in fear, let’s continue to work on influencing the people who make decisions about our industry, so that we can at least play a role in our own future and hopefully arrive at sensible, workable solutions.”
can you guys just move on and let the regulators do their jobs to sort out the BAD apples
If regulators think the best way to “get rid of bad apples” is by poisoning the whole orchard, burning down the trees, and concreting over the soil, then it’s more than appropriate to question their approach.
FASEA has completely lost the plot and is heading down a path that was never intended by the legislation. The new minister needs to rein them in immediately.
Unfortunately FASEA’s heavy handed approach is getting rid of most of the good apples as well. They are pushing consumers into the clutches of “junk food” financial advice. (Advertising, social media, real estate agents).
i just read that 55% of people have been ripped off by a tradie – not doing the agreed job, not sticking to the original quote, surprise additional costs. Royal Commission into tradies please and a BID. I suggest a look back period of 10 years on fee for no service.
Anyone, off the top of their head, name the seven safe harbour steps? If not, you got that question on the exam wrong.
OMG, they are going to butcher us.
You clearly have not read the AFAs submission on the FASEA exam..
And what are our so called representatives the FPA and AFA doing about this lunacy??? They are a bunch of corrupt clowns. Get off your arses and FIGHT for common sense and for the money you suck out of advisers or you will be out of jobs as well once we are all gone!
“our so called representatives”, ha ha you kid right, nah you kidder. they are tweeting on $400k salaries and doing sweet FA as they are fully funded on your (and mine) dime, why not they have to be accountable to no one. they have to answer to no one. it’s the best sweet gig.
do you really think Dante gives a rats (rhetorical question)
the only suckers in all this are those who are still members of the FPA and the AFA
I suggest you read the submissions from both the FPA & the AFA. They are fighting for the rights of all advisers and have made strong cases that FASEA have gone too far.
Foolish and somewhat egotistical agrevators
Australian immigration law used to allow potential migrants to be excluded based on the results of a test given in any language of the immigration official’s choosing. Of course that meant the immigration officer only had to choose an obscure language the applicant was unfamiliar with in order to exclude people against whom they were prejudiced.
FASEA seems to be embarking on a modern day repeat of that shameful process. A legalised way for prejudiced bureaucrats to eradicate financial advisers… “Hey, let’s make the @#$%s pass an impossible test! The guys over in Immigration used to do it all the time!”
Perhaps it should more accurately be called the Financial AdviserS Eradication Authority?
Hehe, it does not get better even now for a mirgant and I am both a financial planner and a migrant. What are the odds!
Nobody has told us WHY we are having THIS 2019 exam, given we are told we must go and get DEGREES(!) to sell life insurance in 2024. You couldn’t make this idiocy up! Un-bloody-believable! These absolute clowns drafting this stuff have no idea about delivering insurance advice to clients – this much is obvious.
This actually highlights the key to the whole problem Squeaky. The licensing regime classifies people who just want to ‘sell life insurance’ as the same as financial advisors. There should be room for life insurance salesmen, who work for and are remunerated by a life company on any chosen basis, just like car salesmen – and separate licensing for financial advisors who act on behalf of the client etc. The difference is quite clear – one owes allegiance to the product provider and the buyer knows this and makes a decision to buy or not to buy – and the other acts on behalf of the client and has as central the interests of the client. The product doesn’t matter – life insurance, super fund, estate planning etc. A single licensing regime was a HUGE mistake.
As a life Insurance salesman, I agree completely.
To DOD, Everybody is a ‘salesman’ if we are being particular – you sell yourself, your ideas and solutions. If there is no selling involved there is no commission or fee or remuneration as the client does not ‘buy’ what you are selling (ideas/solutions). I take issue with the fact people ‘tar’ all life advisers, off-handedly, as common “salesman” (the intonation is along the lines of ‘car’ salesman of course) and it is said with a negative connotation. It very much comes across from people who seem to have an axe to grind and/or perhaps do not understand exactly how difficult it can be to advise/convince/sell to a client the idea that protection for all they hold dear may be important. I don’t hear to many here calling wholistic financial planners “salesmen”. If I am being factual then they’d bloody well better be “salesmen” (& women) or they won’t do the best for their client by convincing them to make the move/commitment to finalise the best solution with that planner TODAY! We all know about procrastination and I know for a fact that the very best financial planners and life advisers in Australia are some of the best salesman in Australia. Absolutely everybody in this world fails or succeeds in direct proportion to how well they can sell – themselves to others, their ideas, aspirations et al. So please, no more of this uneducated trite and backhanded negativity towards professional life advisers by badly applying the term “salesman” in a derogatory and inappropriate way. It is called professional courtesy and common politeness, as a refresher. Thank you.
welcome to the new Australia… crap political leaders driven by polls and consumerism.. the luck country where red tape and bureaucracy is strangling business.. the worst thing is that all of these so called “experts” wouldn’t know a financial planner even if they fell over one! It is only going to get worse with Mr Shorten about to take over the reigns!!!!!!
It’s ok i just applied for a job with an industry fund.
Yep- no degrees or exams required to work for them
Au contraire, mon ami. VERY important to be aware that Advisers within Industry Funds who are licensed (some on the FAR under Industry Fund Services Ltd AFSL 232514) will also need to sit the exam AND get to the new qualification standards just like everyone else.
Damn, oh wait maybe they will have different rules on passing.
The licensed advisers at union funds will need to comply with FASEA, but most union fund advisers are not licensed. They are spruikers who go into workplaces to tell people to take their money out of evil bank funds and put it all in union funds. No FSG, no SoA, no consideration of personal circumstances.
Financial advice is only regulated in Australia if it is given by a licensed financial adviser. Unlicensed people like accountants, real estate agents, bank tellers, call centres, and “workplace representatives” can give as much dodgy financial advice as they like with complete impunity.
The Royal Commission has chosen to completely ignore unlicensed financial advice, even though it is responsible for far worse consumer outcomes on a much larger scale than anything that happens in the licensed advice sphere.
here here! Well said
So did I, probably a secure career path there. Industry Funds and Banks will survive. Financial planning is just another ring fence around their clients, not a profit making enterprise. Still all about FUM.
Keep up with the leaderboards then, and put your head down and don’t argue with their ex-bank compliance officer.
The question that nobody can seem to answer, including the Government, Lobby Groups and even certain ‘advisers’ commenting on these forums, is what will this exam achieve and how will this improve advice outcomes to clients? They all cite “Scandals” as being the underlying reason for FASEA being set up. Yet, these “scandals” have been the work of the banks, financial institutions as well as product manufacturers with products not being true to label, as highlighted by the RC. Advisers seem to be the scapegoat for other’s conduct once again. Out of the thousands of licensed advisers in Australia if you look at the percentage of advisers that have done the wrong thing, the percentage is incredibly small and of that percentage, a number of these advisers (as reported in ASIC banning reports and media, already held tertiary qualifications, with technical ability not being cited as a reason for the banning). Yet, what FASEA and the Government is effectively saying is that all advisers are incompetent and not capable of providing prudent advice or quality service to their clients unless you can prove otherwise to us by passing an exam on subject matter that has next to no relevance to your role as an adviser! They are also effectively saying to the client, that let us determine whether you should be happy with your adviser and whether your needs and objectives are being met, as you are not capable because you are only the client!
I have been an adviser for 20 years and I have no issues with doing any bridging courses that FASEA may eventually advise they required advisers to do, but I take issue with sitting an exam that appears to have no relevance to the actual day to day adviser/client relationship and that does not test my practical ability to provide competent advice and service to my clients. I expect the next brainwave from FASEA will be that all Risk only advisers will be required to hold a Bachelor of Medicine and pass a closed book, no guidance examination to be admitted to the Royal Australian College of General Practitioners !
well said !
It should be noted that the criminal charges that the RC are considering are against banking executives who do not hold any qualifications in providing financial advice. They most likely all have MBA’s though
Independent Dealer Group ???
No such thing
Oh Knights who until recently said “Ni”. Yes there is such a thing as independent. You just need to satisfy 923A of the Corporations Law
Rubbish there is !!!!!!!!!!!!!!!!
I have good advisers with 20 to 35 years experience each. They may struggle with these stupid tests but know more than the idiots putting these tests together about practical application of advice. You can’t replace experience but you can just loose it with this crap.
‘lose it’ you mean. Closed book exam may be right or may be wrong depending on the questions. Anything based on particular sections’ detail must be open book – no choice. Something based on the intent of the legislation – the ‘vibe’ – can easily be closed book – the book wont help
expecting advisers to remember the law better than lawyers
in this day and age when information is everywhere, why have a closed book exam on 500 pages of legislation
even politicians dont know if they have sufficient authority to represent constituents in canberra
The question should be asked what we as industry should learn from this Government Over regulation. Many advisers I talk to are living in the 80’s and so if we continually are unwilling to change them who cares if some advisers leave. Like why do professional association get payments from suspects in the Royal Commission.
who are the gutless ones here with anonymous? seems to me if you don’t have the guts to put your name down don’t comment …or are you industry fund representatives or employees of choice?
Les you are stating what I have stated on these forums for a long time. Perhaps the solution is for IFA to disallow any anonymous comments. If people have something to say they should have the guts to put their names to it or just shut up.
Les, with much respect to you, many here use the anonymous label as there is a very real threat (or potential) of recriminations for speaking what is truly on your mind. Sometimes, like with me, it can reflect badly on life companies – that’s why I don’t use my name. If everyone used their real name Les you would be sickened by the political correctness which would pervade the comments sections across Australia. My only issue with the ‘Anonymous’ label is that it is impossible sometimes to tell one from the other so it would be good if people used a style of Anonymous like I have – “Squeaky_1′ or just something a bit different. Would help the flow of comments and clarify things better.
Get over it Les.
If a Law student does an exam, they have text books at hand to look up the relevant law. They don’t have to commit to memory everything so why are we any different. When I told my daughter, who is a solicitor, what we would have to do, 4 hour closed book exam on Chapter 7, she laughed and said,”you are kidding aren’t you”.
I dont recall any 4 hour exams when I did my degree. I think it’s ridiculous to require people to memorise entire swathes of information
yep law exams are open book
while I think the article is slightly sensationalist, the fact remains that many advisers will have had enough , I am one of them, I’m planning my exit a few years ahead of schedule. since making that decision, I am much more relaxed within myself and will move on remembering the good i did, rather than the bad I’m accused of .
I am a 20 + year financial planner who doesn’t write risk. I refer it to a risk expert who provides an excellent service to my clients , a number of which have benefited significantly from the cover they have claimed on from the policies that were correctly matched to their needs by the risk adviser. This risk adviser is a specialist in his field, who i call on to provide and add value to the services and advice i provide as a planner . This risk adviser, who is in his mid 50’s does not profess to know much about Corporations Act, transfer cap limits, alpha/beta etc etc ,,nor should he have to. The one size fits all proposed FASEA exam is another example of the academics and politicians having no clue about our industry and how their plans will prematurely remove mature skilled and trusted professionals from providing advice to their loyal and aging clients.
Well said Garry, I am in the same boat as yourself. Personally, I have a degree in economics and several post grad and am very nervous about this, particularly around risk insurance as well as chapter 7. I feel for the Australian consumer. I keep thinking about the phrase ‘be careful what you wish for’
I think all of ASIC senior management should pass first as a litmas test. Detailed rote knowledge of legislation has never been an issue in any profession, as long as you know where to look it up.
That would be “litmus” mate. Good thing the exam won’t include a spelling test. Anyway there will in fact be a test group for the exam commencing mid 2019 before it is rolled out nationally. Maybe ASIC could send some staff to sit the exam in that test group. That would be a good idea!
i think it is intended. and probably set to fail the vast majority of advisers this is a disaster for the industry.
thanks AFA and FPA, you did well
I’m sorry Don, risk Adviser are financial planners, Wealth Protection is a discipline of financial planning . The 4 hour exam will stretch most regardless of what type of practice they run and what type of qualifications they hold.
what ignorance you display
this is lazy and hypocritical by the legislators
well done Synchron.. this FAESA approach needs to be called out for what it is.. Harassment and Bullying at the extreme. I am concerned about the mental health consequences for the many honest and hardworking people in this industry. It is just not right morally and ethically, but who cares.. more fund throwing the boots in (and this forum just breeds pathetic opinions).
So when its all said and done.. what the hell does all of this over complicated red tape achieve? Fewer advisers… high costs.. more complicated compliance…less personal advice.. jobs decimated in the industry… poor outcomes for consumers… more profits to large corporates… more legal firms suing the backside off every planner left.. be careful what you wish for when people on this forum take the high moral ground..
It is an absolute mess what O’Dwyer has created – just a classic example of how our Politicians go off half cocked appeasing the left wing socialists that are taking over this country without truly thinking about the UNINTENDED CONSEQUENCES. Just short-term thinking.. although worse to come.. open the door for Mr Shorten and his Union Fund mates to absolutely squeeze the life (whatever is left of it) out of this industry (as it has only just began).. Need to question the viability of staying in this industry when all you get is a whack from everyone (and those do gooders that just choose to ignore all of the great work that is done by us dodgey advisers!).
Goodluck!!!
Well it seems that you and most people slagging FASEA are having a go at the wrong target. I’m guessing you’re one of these people who smash the poor checkout chicks at Coles for not giving away free plastic bags any more…. The government enacted the legislation, they’ve put the timeframes in the law, they’ve said that advisers must be AQF7 or better, they’ve said that we need to sit an exam. The Board & staff at FASEA are the ones implementing the will of the government. If you want to complain, write or speak to your local member. But be quick. The way that these dills in the LNP are going they will be lucky to last until Xmas, let alone run full term. And what do u expect is waiting for us from a Shorten Labor Govt? Not anything good, that’s for certain. If Shorten didnt have enough enmity for financial planners already, the revelations from the RC will see them tear this industry to shreds. Practice valuations are falling as uncertain is building – both around the changes from the RC & from the education requirements – and as sellers start to out number buyers.
Correct me if I am wrong, but it has been reported by several sources, including Deen Sanders, the previous head of the authority, that FASEA have taken the proposed standards a lot further than what was intended by and detailed in the legislation and things are being rushed….?
Yes, the government said advisers must be AQF7 or better and pass an exam.
But it’s FASEA who is saying they won’t accept much of the AQF7 or above training that advisers have already done. It’s FASEA who is setting a ridiculous exam on tangential topics. FASEA is not delivering what the government asked for. They are not aligned with the spirit of the legislation. They appear to be either hopelessly conflicted or utterly incompetent.
Its funny you mention bullying. Kelly O’Dwyer was quoted in The Age today as saying “bullying and harassment has no place in the work place” when she was questioned about her new portfolio! She is a complete hypocrite! Time for her to be called out publicly!
well said Ben – just sad what is happening to this industry.
Re Chapter 7: Is it 30% weighting or 30% content? We don’t know yet. Also, reference to 500 pages seems a bit like sensationalism to me.
Look it up.
Chapter begins on page 996 and ends at page 2,332. Volume 1 2018. However it is now the end of August and we are none the wiser of the content or consistency of the exam. I have a current Master of Financial Planning degree and 37 years of experience and I would suggest not consider this article as sensationalism. I would suggest that FASEA’s expectations as unrealistic
[quote=Anonymous]good way to sort out the bad apples[/quote]
Bad apple? What a sophomoric, throwaway line that completely misses the point. Did you even read the article? Perhaps someone should come to your place of business and test whether you’re ‘worthy’ enough to do whatever it is that you do. Be careful what you wish for.
Surprise surprise, more complaining.
We adore you Don, only vocal to support advisers, particularly Risk Insurance advisers. Being part of your licensee, there are many life agents in our group. ASIC have approved our 4 page Risk Insurance only SOA because of you Don
Seriously. Your persistent manipulative trolling is getting tiresome. You write like you are a Synchron AR, but if you were, you would never make the claim, nor boast about anything as ridiculous as an ASIC approved SoA. Real Synchron AR’s know better and FYI – it hasn’t been 4 pages for some time now.
so far, the whole thing is a farce. Add in the RC giving industry funds a clean bill of health…. we are being set up for failure by one means or another.
How many pages of the Corporations Act would the average corporate lawyer know by heart.
i would say 10 at best
good way to sort out the bad apples
Not sure how an exam on say Engineering Skills helps a doctor to provide medical services. The same applies here. You should be examined based on your areas of service delivery, otherwise what is the point of the exam REALLY?
[b]instead of cowering behind your anonymous and throw stones have some guts and put your name to your insults[/b]
It you want to be the anonymous provocateur stirring the pot, what about having the courage to put your real name to your ridiculous and uninformed comment ?
How does passing an exam make you a good apple?
how true.. but too simplistic for many of these gutless people that post on this web site!
I wonder what the pay out % of claims paid are for financial planners v risk advisers.
Seeing online forums and adviser groups it is generally the ‘holistic’ advisers that have no idea what they are doing come claim time. Have seen so many posts where they have accepted claims outcomes that no risk adviser who is worth their salt would accept.
Really? I’m one of those obviously inferior ‘holistic’ advisers and I’ve had TPD claims paid that even respected industry claims gurus have suggested that I was wasting my time with. So like most things, generalist broad brush statements like yours are just rubbish
Given that most specialist Financial planners i have met or dealt with in my 35 years write very little life insurance, and given they also have (in the main) a less than spectacular knowledge of insurance products, i suspect there are a disproportionately high number of fails, but I’m only guessing
You musnt get out much…