As captured in FASEA chief executive Stephen Glenfield’s opening statement to a parliamentary committee, there were around 900 potential new advice entrants enrolled in bachelor degrees or higher at the of 2019. Around 200 had completed their professional year (PY), with more than 75 passing the FASEA exam.
In contrast, Adviser Ratings analysis of the ASIC Financial Advisers Register showed around 4,378 advisers left the industry over 2019.
Mr Glenfield noted the FASEA educational standards and the requirement to have a degree to enter the profession is new and it will take time to catch on.
“By making this a career where you come in with a degree, where you get… PY training, where you do ongoing CPD like any other profession, we’ll ultimately attract good graduates in,” he told ifa.
“And you’d be hopeful that these numbers will increase as the years go by. Part of that responsibility rests with industry and promoting itself as a profession, that is a good place for people to come to, to get a degree and join into financial advice.”
Close to 50 per cent, or approximately 10,000 advisers have now passed the FASEA exam, with around 14 months of the transition period to profession remaining. The current overall pass rate on the exam is 89 per cent.
But stricter education standards are only one factor causing advisers to exit, alongside a fundamental restructure of the industry as larger players have left, Mr Glenfield added.
“There’s no doubt a lifting of standards and lifting requirements – not everybody wants to meet that,” he said.
“But ultimately, the outcome is a lifted level of standards for the industry, which ultimately is aimed to increase consumer confidence in taking financial advice, which is a benefit for both the consumer and the industry longer-term.
“This is significant change and it’s at a time of difficulty, even with COVID aside, this is a challenging time for advisers and I think they’re doing incredibly well in standing up and meeting these due standards.”
The FASEA chief appeared before the budget estimates economics legislation committee on Tuesday, where he was questioned on a number of factors, including CPD requirements.
In his opening statement, he had noted that there were concerns from advisers about some forms of CPD not meeting the education requirement. But FASEA had been guided by the Corporations Act, which stated in order to meet the education requirements, the CPD recognised must result in an equivalent qualification to a bachelor or higher degree.
Advisers are required to complete 40 hours a year of CPD, but the majority of it undertaken does not result in a bachelor level or above qualification, the opening statement said.
“This has sometimes been difficult for advisers to accept, particularly those who have considerable industry experience and regularly maintained their CPD requirements,” Mr Glenfield’s statement read.
Single disciplinary body looming
Looking ahead to next year, FASEA does not yet have a clear view of how it will be integrated with the single disciplinary body for the advice sector, which is now due to be established from the end of 2021.
Mr Glenfield commented that regardless of whether the government decides to merge FASEA with the body, the two will need to collaborate closely.
“FASEA is the standards setter, but the actual monitoring of the code and testing of compliance and taking any action for people not complying with the code will rest with the single disciplinary body,” he said.
“Regardless of what form it takes, there will be a need for FASEA to work closely with that body, whether if that’s part of the same body or as separate bodies … the key will be working together.”
I have 15 years FP experience, hold 2 ‘Approved’ degrees (yes, 2 financial planning specific degrees) plus a relevant degree (yes, 3 degrees all up) plus CFP, SSA, etc. I also lecture financial planning at Uni. I am roughly 25 years from retirement and last week I resigned/retired from financial advice. Glenfield thinks only those resisting the FASEA requirements are leaving. Wrong, I was among the first tranche to tick off all FASEA requirements. Many of those leaving are leaving because they have options and they are using those options. Financial Planning as it is currently regulated is DEAD. Technology is not the answer. Deregulation is the ONLY answer. Tax deductibility will not save advice, it will only reduce the spiraling costs by about 30% for the average consumer. That 30% will be quickly replaced by higher costs due to all the new ‘levies’ that are coming.
I wonder if this muppet will read the comments as he is obviously out of touch. I couldn’t find one positive comment about the state of financial planning as an occupation.
FARSEA CPD please explain ?
You make already well educated and experienced advisers waste 120 hrs on the most repetitive and useless Ethics course.
Yet FARSEA say 120 hrs COD only = 30hrs CPD.
And then the way you award the course CPD it doesn’t even count for 30 hrs of annual FARSEA CPD required. So 120 hrs CPD doesn’t even count for 30hrs.
Cant wait for the 50 page CPD guide of waffle.
why would anyone waste their time and money complying with all this BS full of red tape industry only for ASIC to ban you for life for simply forgetting to hand someone a stupid FSG?
No way would I EVER try and promote this as a good career path to an unsuspecting young adult. That would be cruel to cripple someones life before it has even started.
“And you’d be hopeful that these numbers will increase as the years go by” So that’s your solution Mr Glenfield, Hope? Yeah keep hoping and you might win Lotto too! Typical useless bureaucrat.
I wouldn’t recommend financial planning as a career to anyone, not even Marlon Samuels
Clean bowled FARSEA
Well played Warney
Well done, very clever. You are also correct.
The irony is that anybody who enters this industry/profession does not understand the risk and return trade-off involved. On that basis, they should not be in it in any event !
i feel like the daily comments on here are like CNN hiding the truth
I do love my job – I love meeting clients and helping them work through to find solutions. But i am now very very scared that my absolute best will be trashed in the future because some govt pen pusher disagrees with what i’ve done today and I will be hung out to dry. It’s hard to make money. the constant uncertainty is anxiety inducing. I’ve done all FASEA asked of me but i might be forced out of a job and business in a few years. How are we advisers copping the brunt of the Royal COmmission and no industry big wigs seem to be suffering at all.
Ok, here is my advertisement:
Have you always dreamed of a career where you:
1. Get paid little more than the average wage despite completing a university degree which is not transferable to any other industry
2. Have your personal assets on the line
3. Work 50-60 hours a week
4. Live with the stress of being audited back ten years, with new interpretations of laws applied retrospectively
5. Can be forced to refund hundreds of thousands, even though your clients are happy, value your service and have never complained
6. Can be banned from practicing if you make a simple error even though no consumers are harmed
7. Have a regulator hell bent on banning most forms of revenue
8. Are forced to write an 80 page document to deliver relatively straight forward advice on super and insurance because your licensee is justifiably petrified of the regulator
9. Are then ridiculed for delivering such a large document by the regulator, even though the regulator themselves have not been able to deliver a sensible example on the same topics
10. Are forced to get down on your knee every year and beg your clients to sign 4-5 documents so you can earn your fees
11. Are forced to pay ASIC, TPD, FASEA (yes it’s coming), Compensation scheme (yep coming too), Licensee fees, PI insurance on top of staff (which is a must these days to meet compliance requirements), rent and the other normal costs associated with running a small business
12. Complete more CPD than a brain surgeon, to meet three different programs from TPB, ASIC and FASEA
13. Be forced to adhere to an impossible Code of Ethics that allows the regulators almost unlimited opportunities to trap you with a breach
14. Spend 60-70% of your time writing documents which offer little, if any value to clients and are essentially written for compliance staff to read
15. Are belittled and insulted in the media, because a) fear sells; b) they are funded by large institutions which have powerful political allies, and who view you as a competitor; and c) government bureaucrats release dubious and misleading information as a smokescreen to cover for their own failures and to push their own biased, nasty, ignorant agenda
16. Have a regulator who doesn’t consult with you or your colleagues and makes decisions without considering the impact on your livelihood or consumer detriment, to achieve theoretical outcomes which have not been tested or researched
17. Have professional bodies which have been infiltrated by corporate types, who are using their position as a stepping stone into corporate and/or government gigs so they are afraid of saying anything negative or controversial
18. Are forced to pass an exam which will end your career and render your years of experience and study useless if you fail
19. Get thrown under the bus by the regulator when they fail to prevent dodgy operators from delivering advice and issuing harmful products because they are too focused on their obsession with the fees you earn
20. Live in frustration because few,except those who are already rich, can afford to pay the fees you are forced to charge to offset all of the above.
If all of the above sounds appealing to you, it is time to complete a professional year. All you need to do is find a financial planner who is willing to spend hundreds of hours supervising you, allow you to liaise with their clients without them being present, allow you to write a report on ethical dilemmas you find in their practice and then stand by as you submit 5 of their files to their licensee for auditing on top of the usual annual audit they dread every year.
PS. If any prospective financial planners read this, please hear my warning – the above comments are not a joke.
Excellent comment. Really captures what it is like at the moment. Madness.
FARSEA, ASIC, HUME, POLLIES, please read this.
Well articulated long, long, list of Adviser problems from Canberra Bubble Bureaucratic Morons.
Great job Canberra. Wtf do they think ?
Hear here
Sad… but true!
Very well said Giggity – I tried to like your comment but like links not working. It is exactly as you say and even worse.
why don’t the like buttons work on here anymore? Is someone afraid of hearing the truth reinforced hundreds of times over?
Well said Gigity
The FPA and AFA need to read this piece by Giggity and rush to Canberra immediately to correct all this garbage if they want to have anyone to represent and keep their cushy jobs in the years ahead. Better yet I nominate Giggity as president of both organisations.
Well said!
You couldn’t have possibly done a better job of encapsulating the current state of affairs.
Do you mind if I plagiarise this?
I’d like to send this out.
I have never read a statement more out of touch from someone in charge of an administrative body for the very industry they oversee. Who is it exactly that will be advertising that this is a promising career path exactly? What they fail to understand about “which ultimately is aimed to increase consumer confidence in taking financial advice,” is a moot point because they have priced those consumers out of the market in the first place. Sure they may recognize the importance of advice, but they won’t be able to afford it.
Many existing advisers aren’t exiting purely because they don’t want to get advance degrees or the like, they are leaving because there won’t be a return on equity, let alone the sacrifice of their time to do so. Having done most of the new education requirements, it certainly doesn’t improve my advice more than the almost 20 years of experience has.
Typical rhetoric from an organization that knows they screwed the pooch. Sure FARCEA, we believe you there was no pooch… Hopefully the single disciplinary body can go a long way to undo the damage to the industry FARCEA has done, although for many this will clearly be much to late.
Its not a young person’s job. Old or middle-aged people are better suited to the work. Therefore it is usually a second career for most applicants. Then they have to do tertiary studies as well as a career change? Who can afford that?
I’m sorry, but is this a joke post? “Old or middle-aged people are better suited to the work” – is this a genuine sentiment?
What other professions should young people stay away from? Accounting, engineering, medicine, architecture?
If it is a joke, congrats, you got me.
If it’s not, and that’s your actual attitude, might be time to reflect on the situation we find ourselves in without enough young people coming in.
There is an argument that older people won’t listen to a 21 year old telling them where to put their investments. Realistically however age does not determine if someone should do financial planning as there is no justifiable reason to enter into the profession at the moment and a person completing a university degree would seriously have to hate themselves to consider financial planning unless their parent owned a very successful business they could inherit.
FASEA is clearly a redundant agency which can be close down after merging.
As someone who has two relevant double degrees and been advising for 35 years to say you need to have a degree to be a good adviser is rubbish. There are many other ways Advisers have got the required skills and education and all Fasea has done is create heartache amongst good Advisers’.
No compassion on prior learning or experience. Just an unbelievable approach to saying this will be a profession of degree qualified inexperienced operators.
Couldn’t agree more G.
Apart from setting the exam and education uplift, FASEA is not needed or wanted. All they have done is bring confusion to an already overly burdened industry with the embarrassing Code. One only has to read the code of ethics to realise it is an unworkable document and I pity the poor souls that have to monitor and enforce the code, if it ever becomes legally binding….
The key FARSEA would be working together with Advisers, something FARSEA has been completely Unethical and arrogant about.
Where are your Conflicts Registers FARSEA ?
Why isn’t FARSEA held to the same Values and Standards it God like hands out to Advisers ?
FARSEAcal this whole thing continues
My advice to any new entrants – Don’t do it! There’s better ways to earn a buck than being a financial planner
I love being a financial planner, but I’m sorry Mr Glenfield the chance of me recommending planning as a “promising career pathway” is absolutely zero! I wouldn’t wish this industry to my worst enemy given the current state of play.
It would be lovely if you became part of the solution rather than throwing lovely platitude’s into the mix.
“… market itself as a promising career pathway.” Hilarious….he could win AGT as a comedian.