In a new white paper — which outlines a proposed framework that the peak body claims could reduce the cost of providing financial advice by almost 40 per cent — the FSC said it supports changes that recognise prior study and continuing professional development (CPD).
It has also called for an assessment of whether industry-developed courses and qualifications meet the FASEA education and CPD standard offered by tertiary institutions.
“Education requirements have increased the cost of advice. However, it is important for professional standards to be given time to mature,” the paper reads.
“The FSC supports changes over the medium term to deliver a professional framework that is more inclusive of different qualifications or development pathways that reflect the FASEA standards.”
It comes after Lifespan Financial Planning CEO Eugene Ardino said the exam has created “a lot of self-doubt” particularly in senior advisers during a recent episode of the ifa Show.
“An exam that quite frankly, in many cases, doesn’t have a lot to do with giving advice, a lot of it’s very academic,” Mr Ardino said.
“I did the exam and, my goodness, I was lucky enough to pass and partly it’s because I live and breathe at a licensee level, but I left there scratching my head thinking, ‘Where are these questions coming from?’”
In July, Michael Harrison, chair of dealer group Synchron, revealed during a House of Representatives standing committee that his study in accountancy is not currently recognised by FASEA as a prior education as it was undertaken at the time as a diploma and not a university course.
When asked how many advisers he thinks are leaving the advice industry because of the current FASEA standard, Mr Harrison replied: “I think a lot.
“Just looking at our own records at Synchron, what we’re seeing is a lot of the older guys are moving into mortgage broking because they consider it less onerous, less regulated, they don’t have to worry and there’s no argument about where the commission is going to appear.
“I think that’s an issue. But I think also anyone over the age of about 55 who looks at going back to university to do a degree is saying, ‘It’s all too hard, I’ll find another way.’”
Few financial advisers properly understand retirement modelling – which the biggest element of personal investing and saving. Australia is said to have one of the most complex retirement systems in the world – where all risk and most decision making is passed to the individual. There is much more to it than just ‘investment volatility’. It requires a firm grip of stochastic scenario generation, demographic modelling, social security rules, cashflow patterns etc etc.
Advisers are not taught this well, instead they are forced to be busy “complying” with rules written by others who don’t get it either.
I think the exam was fair and relevant. They want to know that advisers understand compliance, the financial planning process and how it interacts with other legislative instruments.
Any adviser who found that exam hard, shouldn’t be an adviser. If you’re a client seeking financial advice, why would you want to deal with an adviser who doesn’t understand the rules around advice?
Would you trust someone like that to even give the right advice?
To everyone whining and moaning about FASEA, regulation, etc… See ya, bye.
There’s no short-cuts to any place worth going.
Look up ‘grit’. The goods come to those willing to put in the work.
I’m 52.. I’m 4 units short.. after 33 years I’m calling it quits in 2026
Good innings anonymous. All the best
Yep me too, Should I get that far in 2026 it’ll be comin up 44 years. That’ll do it…
I’m 55 and 2 short after 38 years and will also sail off at 2026. I think we move to far to the Best interest of the Pollies and ASIC lawyers. We are longer acting in the best interest in clients, well not by my clients comments
I passed the FASEA exam first time round – biggest waste of time! Time that could have been utilised in being of service to my clients instead.
its too late for a lot of advisers who have left after not having CPD recognised.
Survival of the fittest
We are sales people at the end of the day
Know your product know your client
Is all we need???
Sales ???
This industry it totally over engineered once again
Example of Evolution in practice. The old who cannot adapt are eliminated and make way for the new. Adapt or succumb to change. The same rigid mentality is what led to the advice industry reaching the stage it has where such radical change was required. The exam should not be easy and nor should the study associated.
The issue is no one is stepping up to replace the advisors who are leaving. The old are leaving. Middle aged advisors are moving to less onerous industries and the young are too smart and not joining. In evolutionary terms that’s called extinction. We done Josh
There’s not many brain surgeons in the country, in the hundreds only, and they all earn several million a year. It’s supply & demand and with everyone who steps out, there’s less supply of advisers, yet ever growing demand. The next decade is going to be a gold mine for those who have grit their teeth and levelled up.
@One Power Ball, the young are trying to get into the industry but are being held back by the Professional Year requirement. No company (or very few) are willing to spend the time and effort training someone new at this stage (I’m having trouble trying to convince the company I work for and I am a Paraplanner who is keen to start giving Advice!). Come 2026 things might be different and firms MAY be more willing to take on Professional Year candidates, but I suspect it will be too late by then and firms will need to turn away clients as they cannot possibly take on everyone with less Advisers available.
2025 . . . the AQF8 requirement applies to 2024 so 2025 is the first big year with the remaining ‘survivors’. There won’t be many, I estimate about 5,000. The others a victim of over regulation idiot exams set in irrelevant ways for advisers and completely over the top compliance designed to protect corporates and dealers and associated stress to advisers. No risk advisers will remain, or so few the life companies will have no option but to, sadly, switch to full robo-advice. I’ve been around 36 years watching now and I can tell you I am not far off the mark at all in these estimations.
Let them make up their minds quickly – a lot of 60 somethings want to keep working but are not paying $50k for a uni course when their wisdom and experience far outweighs book learning
Who’s paying $50k? I’ll get it all done for under $10k and all I had previously was my CFP from 2006. That’s less than $5k after tax. A small price to pay to remain in an industry where I can earn well into triple digits net annually.
“ doesn’t have a lot to do with giving advice”. Compliance with legislation has everything to do with giving advice.
There is a reason that your diploma accounting qualifications don’t count, it’s because they didn’t cover the breadth and depth of financial planning.
Stop looking for shortcuts and undermine all of the work done to improve the quality and professionalism of advice.
Yawning
This Fed Govt has totally lost the plot. No industry has been so hammered as this one. It’s a disgrace.
do the maths – in the FY2021 – the Govt. Treasury has ‘saved’ clients of advisers $856m in conflicted remuneration but shelled out $27bn in Jobkeeper to Corporates that didn’t qualify
This is a good point – if advisers breach and overcharge they face a civil penalty and prison sentence. Whereas if the Govt breach and overcharge $27bn, they get re-elected – seems fair…