The Stockbrokers and Financial Advisers Association has taken another swipe at FASEA over its “one-size-fits-all” approach to financial advice that is negatively impacting the stockbroking and investment advice profession and, ultimately, retail investors.
In a recent submission to the government, the Stockbrokers and Financial Advisers Association (SAFAA) alerted to an “accelerated exodus” from the stockbroking and investment advice industry of experienced, retail advisers as a consequence of FASEA’s narrow scope of approved qualifications coupled with an “irrelevant” mandatory exam.
SAFAA’s CEO, Judith Fox, warned that FASEA’s approach is rapidly shrinking the pool of available advisers and would ultimately disenfranchise retail investors.
“FASEA treats all financial advisers as financial planners, notwithstanding the differences between the financial planning advice model where advice is provided on all aspects of a client’s financial circumstances and stockbrokers and investment advisers who provide scaled advice on a client’s investment and shares. They are different forms of advice serving different client needs,” Ms Fox said.
She also drew attention to the education barrier many of SAFAA’s members face, with top-tier talent with degrees in commerce, economics, finance and business required to undertake “unrelated financial planning diplomas” in order to continue to provide investment advice.
Referencing a recent survey, Ms Fox noted that “graduates are voting with their feet”.
“Top graduate talent is being deterred from entering the stockbroking and investment advice profession. Our industry attracts the brightest and the best, but a graduate with a finance, economics, commerce or business degree will also have to complete a 24-subject financial planning degree before they can enter the industry,” Ms Fox explained.
“This will result in detriment to retail investors, who will increasingly be left with the choice of either DIY trading online with no advice or advice from a financial planner who has minimal direct expertise in listed investments and markets.”
With the winding up of FASEA and the transfer of standard setting to the Treasury under ministerial authority, SAFAA noted it hopes that the government will see the need to ensure that education qualifications must be suited to the financial advice provided.
“The degrees sought by the stockbroking and investment advice industry are ones in commerce, business, economics and finance. Approval of these degrees will ensure that retail investors will continue to have access to experienced stockbrokers and investment advisers,” Ms Fox concluded.
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