In a recent webinar for the FPA’s Virtual Congress, FASEA chief executive Stephen Glenfield said while the full impact of the standards framework remained to be seen, the authority was pleased with the interest shown in a graduate career in financial advice so far.
“What we’re seeing is there are quite a number of people doing FASEA-approved degrees that aren’t existing advisers, the numbers are up over 900 and that’s the first year of [the standards] being in play,” Mr Glenfield said.
“You’d expect over time that if there’s demand for new advisers that that career pathway will grow – part of it is an awareness thing, recognising advice as a profession going forward so you can do a degree, join a profession and have a career path.”
The comments follow recent data referred to by MLC Life Insurance that just 12 new advisers joined the industry in the first quarter of 2020, with 38 new entrants joining in 2019.
Mr Glenfield added that around 10,000 existing advisers were also currently studying approved courses, which demonstrated “green shoots” in the sector’s transition to a profession.
“There are thousands of existing advisers putting their hand up and saying ‘I will do the education because I want to go on’,” he said.
“There are green shoots but it is early days on what is a transition to a profession that requires you to have a bachelor or higher degree.”
Mr Glenfield said FASEA did not have a “magic number” in mind in terms of how many advisers it hoped would remain in the industry once the standards were fully implemented, given the structural transformation that was taking place at the same time.
“The reduction you are seeing in adviser numbers, it’s driven by any number of factors, one of which is regulation,” he said.
“If you think about restructuring across major banks, there’s been an enormous shift in the adviser market which has led to a large number of people leaving the market because the jobs aren’t there.
“The key to the future is there needs to be demand for advice, which ultimately has an impact on bringing new entrants into the field.”
Thousands leave and hundreds enter is still a reduction but the bloke in charge of this gravy train can’t seem to do simple mathematics. It also doesn’t matter because the hundreds doing the degrees won’t get employed anyway.
Actually, this sounds like a normal transition from an industry to a profession. It will be a while before the new system is established but those graduates will have much higher technical standards.
When my teenage kids ask me about career advice I tell them do anything except for financial planning.
yes i agree
I also extended that advice to a number of my kids friends.
The disillusion Stephen Glenfield again Ladies and Gentleman!! What else is he going to say? Tell it as it really is and that reflects badly upon FASEA in that it has fallen well short of its intent.
FARSEA, no one except you moron are saying this isn’t the demand for Advice.
It’s the freaking costs of Advice Sherlock.
20 years of ever increasing BA Red tape REGS and costs topped off with FARSEA.
It’s cost every Adviser over $40k per course in lost Work time and direct cost.
Plus $10k for the exam.
Minimum cost $50k / adviser going out to
$250k for 6 courses + exam,
or $330k for 8 courses + exam.
Plus more CPD, plus ASIC levies, PI premium increases, increased Optin admin cost, reduced Life comms LIF and stolen Grandfathered Comms.
REGS ON TOP OF REGS ON TOP OF REGS, let’s add some more costs please FARSEA.
Why did my comment on the unethical course marking of the FARSEA course and the crazy $40k / course costs not get published ?
FARSEA has zero Ethics
Politicians have zero Ethics
Glenfield is living in a dream state and totally denying the facts staring him in the face. Gee I wonder why he refuses to acknowledge it and what every adviser is saying in opposition?
I think FARCEA are taking lessons from Trump when they talk. The real stats are by end Q2 2020, the adviser population has reduced to 21,631, representing a net decline of 1,198 advisers (5.2%) from Q1 2020, which is 80% higher than last quarter and, representing a 21% annualised decline, well above the overall adviser reduction of 16% experienced last year.
It’s a slow motion train wreck.
sure is…!!
The professional year will a huge problem no matter how many grads there are. The large institutions have largely left the ballgame, and most of the smaller businesses can’t afford to train someone for 12 months with no guarantee they will stay on. Apprentices and Trainees in other professions receive some Government assistance with wages, why can’t Financial Advisers get this too? And yes, even if the full 900 were real and wanted jobs and could find them, that hardly puts a dent in the numbers leaving. Not to mention the loss of thousands of years of experience.
Agree totally.
Why would someone want to spend 4 to 5 years completing studies to obtain a Graduate Dip to then have to put up with all the red tape that the industry has been forced to adopt to write a piece of business.
rather spend 4 to 5 years study to become a doctor of medicine or something else.
The problem for graduates is that very few practices are offering a professional year, instead preferring to bring in new talent on Deliveroo wages, to run errands and do basic admin for a few years. Graduates looking for a career in financial services will look elsewhere.
I agree, having people graduate is one thing, being able to complete a professional year is another. Given the price increases required for advice, I’m just not sure how many businesses can afford to provide the professional year and the several years of experience most advisers really need after that to be self sufficient.
Purely an academic outlook. In practice this is not going to go they way they are trying to claim it will.
The reason practices are reluctant to offer graduates a professional year is it involves enormous amounts of additional compliance. When experienced advisers are already drowning in compliance, the last thing they want is more of it.
These poor kids have no idea what they are in for.
The only enrolments surging is the advisers signing up for the redundant Ethics course – you only need to consider past annual figures of enrolment to understand this ‘surge’ has nothing to do with “new advisers”.
900 grads, but who is going to take them on for a professional year, pay the extra PI and licensee fees. The Grads will also realise we operate in a multi-layered red-tape shit storm and wont want to be in the industry.
Correct. Nobody will take them on.
Not 900 grads – 900 new students.
Of the 1st Financial planning degree offered by RMIT in 1996. From memory there was about 30 of us. As far as I know there’s only remaining practicing adviser. 4 others are still in the industry somewhat, but not advisers.
sadly the graduates will have nowhere to go to be employed and i really cant see any of them starting from scratch like so many of us did way back in the 70s & 80s
a lot of young graduates don’t know enough – a piece of paper does not replace 30 years of knowledge
Hundreds do not replace thousands. Perhaps we should have someone in charge of FASEA who can count…….
…Glenfield taking counting lessons from Trump?
even more funny is the fact that Glenfield was an accountant. and he cannot count.
I feel it’s my duty to go and find these 900 poor souls and slap them into reality with their chosen career path.
I don’t believe they live in Australia…..
I respectfully suggest that Mr Glenfield actually has very little knowledge of this industry. If a graduate is interested in entering the Advice profession, it would be because they do not yet know or understand the risk/return trade offs. If they did, they would not pursue advice as a career.
Assuming they all carry on and actually pass that’s over 50% of advisers that will be leaving the industry. Then take natural retirements and those that give up due to lack of earnings and it will be higher. And that’s a figure to “play down” ??!!