Addressing the AFA Virtual Conference on Thursday, Mr Jones said the thousands of advisers expected to leave the industry in the next few years were the result of government “mishandling” of the transition of financial advice to a profession.
“In the 12 months since I last spoke to you, we’ve seen over 4000 advisers leave the sector after FASEA’s final standards were finally published, we’ve seen more delays due to the mishandling of the process and more advisers are expected to leave the industry in the months ahead,” Mr Jones said.
“It’s a significant concern not only for professional advisers, but Australians at large – there’s never been a time where households and businesses have had a greater need for quality professional advice.”
Mr Jones pointed out the Australian economy was “in the first recession in 30 years and the deepest downturn since the 1930s”, and it was disappointing that in the midst of this the government had “bungled the implementation of reforms that have been a decade in the making”.
“We believe the FASEA process needs to get back on the right track – there needs to be greater consultation with all sections of the industry to ensure the recognition and training arrangements are right,” he said.
“Hardship has been visited on the profession at the very time where we need the profession to be looking outwards and focusing on the needs of households and businesses that are doing it tough, and now more than ever relying upon the advice you are best placed to provide.”
Mr Jones said industry educational and ethical standards should not involve “throwing the baby out with the bathwater” and needed to be implemented in a way that was fairer to existing advisers.
“We’ve got to ensure that we have the professional accreditation and training standards right – we don’t want to be throwing the baby out with the bathwater, so we need to ensure changes in standards, that have been coming a long time, are rolled out in a better way than they have been,” he said.
“There have been obvious shortcomings in things like the test arrangements and flexibility around those arrangements. We think the standards body could have done a better job and in the critical years ahead we want to ensure they are improving their game – what has gone on is not acceptable.”
How has the ALP voted in all these decisions on educational and ethical standards that have “thrown the baby out with the bathwater?” If you want my vote, take a stand. Tell us what you would do differently. Don’t tell us you would have ‘greater consultation’. That’s meaningless unless the consultative process influences the decisions.
You’ve said yourself that these changes were ten years in the making. Maybe they took so long because the design was wrong in the first instance. Ask all those clients who have been refunded fees for ‘no service’ yet are stilol engaged with their planner throughout that time.
The problem is not the rules per se. It’s ASIC’s interpretation and lack of clarity if what the rules meant. It’s rules that are left up to interpretation and it’s only when someone evaluates actions after the fact that they confirm it’s against their interpretation.
I have three teenage children who like me love helping people solve their problems. I’ve actively discouraged them from pursuing financial advice as a profession, because for all the good you do – it’s just not worth the strain until the industry settles down with the over regulation.
FASEA should look closely at its Directors / Board – if ASIC’s action re Evans Dixon is anything to go by.
why has it taken you over 3 years to say this now Mr Jones??? You’re a bit late for the dinner table!! Go back to sleep.
Mr Jones: tell me why I can go in for major surgery being in the hands of a surgeon who could literally end my life or severely affect it for years to come if he fails to make the right recommendation or executes it imperfectly, though I get a one-page disclosure document to sign. Meanwhile to invest $10,000 for a client’s child I have to provide a 56 page SOA after completing a 43 page FNA and in the end I can still be banned by ASIC if they feel I should have used a “Balanced” fund (86/14 Growth v Defensive) instead of investing with a 70/30 split via the funds I recommended.
This!!
You also forgot to mention that not only do you have to give the client a 56 page SOA, but you need to give them and make sure they read
1. Your FSG
2. Your privacy policy
3. The 100 page PDS of the investment
And at the end of the day AFCA/ASIC/TPB/FASEA still say you are are liable if the client comes back in 10 years and says they didn’t really understand everything they read.
Easiest and quickest solution – scrap FASEA. All cost no benefit.
If Mr Jones’s political party is re elected the only “advisers” and I say that word loosely, will be working in a Union Super Fund Call center. You’ll be assigned a position in these factories. The thought of advisers out there deducting fees out people’s super funds (a revenue source for Unions) saving them taxes and fighting Centrelink is just immoral.
Maybe there should be clawbacks of FASEA salaries.
Yep, a distinct and separate qualification and exam scenario for ‘RISK only’ advisers would be part of a good start. Myself and many other ‘riskies’ are exiting the business by Dec’21 due to the wholly unnecessary, onerous and ill-conceived qualifications/requirements mandated – FULL financial planning credentials to advise clients on simple risk products as we’ve done for decades. Makes sense ONLY if you wish to get rid of experienced and needed life advisers.
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Labor politicians playing a different tune now that the s*** hits the fan. I recall it was the Labor who initiated and was our most excitable cheerleader of royal commissions which led us into this mess.
The standards are what needs to be thrown out with the bath water and start again with much more clarity of meaning.
1. There needs to be more work done to help existing advisers transition through the FASEA exam. Not indicating which answers are incorrect is ridiculous. Goes against every exam standard known to mankind, particularly when remarking is paid for and a “pass” then results – proving how inconsistent the FASEA exam really is.
2. Those advisers being forced to do up to 8 units should have 8 years to pass those units, not 5. Particularly for retail advisers who don’t have the luxury of being paid easy intrafund advice salary & bonuses (who have time to study), but instead are forced to waste their time chasing Opt-In forms all year (and left with no time to study).
There would have been 8 from the start to the end
FARSA is but one failure, someone needs to look in the mirror- try FOFA etc,etc.
What all the lawyers like Mr Jones fail to understand is that we try to prevent the “car crash” not chase the ambulance and proportion the blame, while taking as long as possible and chalk up as many billable hours after the event.
Is this not the same Muppet that wants to get rid of commissions?
One and the same….
Mr Jones, the Labor party have also caused significant pain to the Advice industry over the last 20 years of ever increasing BS REGS and Costs.
Sure FARSEA has been a disaster and the straw that broke the Advisers backs.
But don’t for a second try to wipe you hands of the absolute mess Advice is in.
ALL POLLIES, ASIC and Canberra bubble bureaucrats are Guilty !!!
Now do something useful and FIX IT !!!
FASEA has certainly been a total stuff up, and Minister Hume has been derelict in her duty by failing to intervene and fix the problems.
However I don’t think the solution is greater industry consultation, as suggested by Stephen Jones. There has been plenty of industry consultation and input along the way. The problem is that industry input has been ignored. FASEA is controlled by ideological zealots and conflicted course providers who have chosen to implement FASEA in a way that benefits their own narrow position. These zealots and parasites need to be booted off the FASEA Board, and the whole thing revised based on the practical industry input that has previously been ignored.
FASEA was initiated by the Liberal / National Party and the legislation and all the time lines were set out before the government had even appointed the Board, before any staff were employed, and with very little funding.
Your option of going back to how things were just wont cut it. Things needed to change as there was no change coming from within. You accuse others of making decisions that benefit their own positions but that’s exactly what you’re advocating with a relaxation of educational needs & ethical requirements, which makes you a bit of a hypocrite…