The FASEA board objectives and strategy over the past 12 months has badly damaged their brand and reputation in the industry.
This almost megalomaniacal approach to bullying and intimidating advisers has taken its toll on many who are resigned to leaving the industry in the short to medium term.
FASEA’s strategy of proposing and pushing critical issues to potentially further demoralise can only emanate from an industry ‘insider’ on the board.
We want to encourage and remind the advice community that there a federal election within 12 months, and advisers shouldn’t throw in the towel just yet.
Yes, FASEA and the timing is legislated, but that does not mean the timing cannot be changed, FASEA’s conduct modified and a rotation of directors will get the undesirables off the board.
We have a knife’s edge election where neither party wants 25,000 advisers, 50,000 support staff and 7 million clients potentially against them.
We have great political leverage on our side if we all ‘sing from the same hymn sheet’.
We have just completed an analysis of 700 emails from all categories of advisers across the industry about FASEA’s exam proposal and related issues, here are the findings:
- 100 per cent agreed with our exam suggestions and other comments we made for the submission;
- There is a strong resentment towards the Turnbull government, the minister and the FASEA board for their attitude towards our industry;
- They want their past qualifications and experience recognised with their future study commitments;
- They want the different categories of advice recognised for education purposes and more time to complete it;
- There is a widespread sadness and bitterness that they are being blamed for the actions of the institutions over product failure and their poorly performing management;
- Many are experiencing symptoms of depression from witnessing their business and family life gradually destroyed.
The commentary in the press recently that FASEA is conducting the old political trick of announcing ridiculous proposed changes to alarm the industry, then back off to where they originally wanted it to be is a cruel act if true.
FASEA has caused widespread pain and grief, which has already led to the devaluation of their businesses and destroying careers.
We hope that some entities whose past executives sit on the FASEA board will not be given the ‘white knight’ kudos of negotiating a compromise to ‘save the industry’.
They have been complicit in the current FASEA strategy and should be banished from the board.
The AIOFP looks forward to working with all advisers in reaching a sensible policy outcome.
Peter Johnston is the executive director of the AIOFP.
I understand FASEA may be difficult for some people due to age and cost etc. But this is not a making of the government, this is a making of the poor financial advice given by advisers. Will a degree make you more able to do your job? – not if you are a adviser who has kept up to date with all of the industry changes and genuinely has the capacity and uses it to act in the best interest of the client. So whilst we moan about how their legislation impacts us remember it was poor advice that brought us to this point. The Royal Commission has demonstrated how broken the vertical integration model is.
Yep, that’s a big part of it Jo but Advisers didn’t just get out of bed one day and decide to give bad advice. The other part of how we got here is the AFSL Executives who pressured their FP businesses – all the way down the line – to sell house product, retain whatever fees they could get their hands on and failed to observe any semblance of professionalism. The model is broken as the “leaders” had no professional ethics.
FASEA? The AFSL Executives have degrees coming out of their …ears (MBAs etc). All that higher education did was give them a greater vocabulary to cover the misdeeds they practiced for themselves and their employers. What it did not do is give them a spine (this takes years of practice by the way, it doesn’t come overnight). So, under the sunlight of the Royal Commission they turned to jelly.
Actually, no. Go and have a look at their profiles. Most AFSL Execs don’t have an “MBA” – or any FP qualifications actually. Not hard to go and check before posting. Your higher education theory doesn’t hold.
Jo, what is your definition of Best Interest Duty and then compare it to that of ASIC. Will any number of degrees help you with this?
Which intellectual derelict is going to be able to afford service to the average Mum and dad or small business owner on the basis of what is required.
I wonder if anyone has done the math around the costs for the new educational requirements. A relevant degree costs roughly $25,000 to complete, I assume about one third of the advisers will be forced to do this. So 10,000 advisers paying $25,000 thats an easy $250,000,000 (yes million) to the education providers for something that is more a tick in the box. Makes me wonder if there’s some alignment of interests taking place here.
Mate, you only need a Grad Dip of 8 subjects and you will likely get 2 subject exemptions if you have some other study – so that’s 6 subjects. They are $2k each so that’s $12,000.
Mate, then you have the 3 FASEA courses after obtaining the Grad Dip so there’s another $6k.
No actually, with a Grad Dip, it’s just the 1 additional Ethics subject course (not 3) to transition past 2024. I know this can be confusing and Dealer Groups are crap at helping Advisers with it.
I don’t know why more advisers don’t take this attitude and just get on with things. They’re not asking us to study engineering! Back yourself in and get on with it.
Jape, I’ve already spent a few thousands on my study to then find out it is not recognised (certainly not yet anyway). That’s a cop out (or theft) right there.
Meanwhile, people say to get on with it. How? FASEA hasn’t stated which Grad Dips they recognise!! $12,000 on this basis is a leap of faith – in terms of money and time.
(Plus another $6,000 for the 3 FASEA subjects)…
1. Fair enough. This has not be handled well. Not the least of which is a person with ANY degree should never have done DFP or ADFP as these are undergraduate courses. Also there should be a simple bridge from ADFP to degree (whch there is not).
2. FASEA have approved the FPEC list. There is a confusing statement on the FASEA website about Grad Dip which seems to contradict this but that can be ignored as the FPEC quals stand.
3. If you hold the Grad DIp it’s just the 1 Ethics course after that.
Good comment on the DFP/AFP v undergrad degrees – hadn’t thought of that. Education providers had no issue taking the money/enrolment at the time though.
Personally, 12+yrs experience in FP, with Masters in science-related degree (non-financial), + DFP/ADFP/CFP.
Clearly committed to ongoing professional development, FASEA as it stands is very frustrating.
Cheers
Definitely need more degrees to be added to the ‘approved’ category but you’re never going to get much Recognition of Prior Learning from DFP/ADFP considering they are open book exams, lower quality/difficulty and most people send around their assignments to others doing the study after completion..
And yes, I’ve done DFP/ADFP.
Sure, though CFP plus non-financial uni degree (AQF7) should count for something.
It was only 15 months ago (pre FASEA) that all major employers required advisers to be CFP-certified, and our primary professional organisation (FPA) was saying that completing CFP-certification was a masters level study with international recognition.
We’re being taken for a ride and I’m not impressed.
I don’t mind paying for a good education, what I don’t like is getting ripped off. Did you guys know the education providers are going to town with these changes. Kaplan for one used to offer the grad dip for around $1400 a subject, currently priced at $2325 on their website. Deakin offers this course for $31k. I just don’t see what they will be teaching us that could cost so much.
I can think of a better way to “spend” $12K, like put it towards my business debt or my mortgage.
I suggest all financial planners reading or writing comments on this blog to make a submission now. You have just 4 hours to make one. Send it to: consultation@fasea.gov.au
Submission extract: In 2004, the FPA reached a milestone with 5,413 registered CFPs in Australia. Then in 2011, the FPA Board changed the education standards for new members to an approved university degree. CFP members had grown by just 240 to 5,653. Fast forward to 2017, the FPA now has a membership base of 12,896 and CFP members are just 5,629, a decrease of 24 since the degree was introduced in 2011.
The major obstacle in the adoption of FPA’s CFP designation and higher education standards is Chapter 7 of the Corps Act 2001. This chapter has ensured that financial planners are not educated to an independent standard like the CFP, and compels financial planners by law to abide by the directions of a licensee which manufactures and distributes product under ASIC’s supervision to ensure market integrity.
Wow, the grandfathered CFP pull is even worse than I thought. No wonder the FPA refuses to differentiate between who actually did the study post degree and those who got it in a cereal box and only keep paying their FPA fees to retain it.
Submission extract: As the Royal Commission into Banking has shown, a licensee with a law degree or an MBA in charge of financial planners, degree or no degree, has complete control over the profession and its legitimacy. Just 8,704 out of 25,386 financial planners have a degree at bachelor level or above, despite the FPA’s education push since 2011.
My submission extracts: This proposed exam will not legitimise or build trust in the profession of financial planning until Chapter 7 of the Corps Act 2001 is rewritten to separate financial planners from product licensing laws. A financial planner with a degree or pass mark for an exam has no powers under the Corps Act 2001.
Dosen’t your support of the FPA’s Professional Partner program conflict with this? Yo
One of you “anonymous” posters is right. Politicians are “on the side of consumers” not advisers…for all the reasons exposed in the Royal Commission. Sadly, too few of us stood up to the FPA and the instos and too few hold their own AFSLs so we are treated like a herd of sheep to be drenched for removal of disease. Pollies listen to associations and institutions because they are similar – hierarchical and authoritative – rather than individuals who they suspect are outliers and/or black sheep. Only when we have a truly independent stance (i.e. completely separated from product providers and with a voice clearly modulated by reason and and making intelligent, informed comment will the law-makers take us seriously. Has anyone approached Cory Bernadi (an ex-planner) to put the case. If not why not? (I can think of some reasons why I wouldn’t, but many here seem to regard him with less scorn than me…) At least he knows the business and he has the contacts. Or is he not inclined to “own up” to being a financial planner these days? Just sayin’
It is disgusting how everyone is attacking this industry… the anxiety and stress levels are through the roof.. I’m not sure how many other industries would accept this in an era where bullying and harassment are frowned upon. No one benefits when the industry is attacked and people leave.
I call on the FPA to remove their professional partners program…it is a conflict of interest pure and simple. Get back to what the original intent was when you desegmented the membership and got rid of the principal member category. Fix it now. It is the right thing to do.
Unfortunately we won’t ever have a united voice. The FPA gets paid from AMP and CBA. Why, if you’re the FPA would you listen to an individual AMP financial planner about their concerns around Fee for No service or even a Non aligned adviser when AMP or CBA is paying the FPA, thousands of dollars via the professional partner program, and directs each year so many fee paying members. We need a new association or existing associations to end this relationship. The FPA has a conflict of interest as a result of this relationship that is clearly seen by Treasury and FASEA and they’re seen to be representing AMP and Bank advisers.
If AMP want legislation changed they can pick the phone up and speak directly with ASIC, Government or Treasury. There is no need for them to be part of a body representing advisers and Australians. We won’t sing from the same sheet until associations stop trying represent advisers and product manufacturers.
I’m not sure how many people realise this but the FPA has been lobbying FASEA to change their draft guidance where they indicated they would accept advisers that have done the right thing in the past and already spent enough time and money completing a related degree in finance, economics or accounting- with a short bridging course- to be considered degree qualified.
BUT NO the FPA in their typical self conflicted mode again abandon advisers and I’m sure many of their own members to push their own barrow. They are now proposing that the only way you can be “degree” qualified is via their CFP program or a whole graduate diploma. What jokers. Putting their own revenue/profits ahead of members yet again. Is this not what they are preaching to adviser not to do???
This should not be happening. Anyone in this position should be telling the FPA where to go in no uncertain terms!!!!
Well said Angry. The FPA’s original recommendation called for Prior learning, CFP courses, Private Education courses to account for only 14 points out of 100. YES 14 POINTS OUT OF 100. Their original proposal betrayed those that studied their own CFP course and recommended Degrees listed on their own FPEC list as counting. There original proposal ignored experienced advisors and highly educated advisers with pre-exsiting Masters Degrees in Financial Planning, Bachelor Degrees in Commerce and Post Graduate Degrees. It ignored Universities in regional and rural Australia and advisers and their staff in these areas. This original submission made it very very clear that the only people they are interested in are the FPA themselves and what they can make for their separate entities.
We’ve been on the back foot ever since. We’ve come a long way but the FPA stuffed up and should be held accountable.
FASEA has completely ignored the elephant in the room of how it expects it’s edicts to be implemented. Where is the guidance on how this will work in practice? For example, with a good number of experienced advisers undoubtedly leaving the industry who is going to supervise the new entrants for their professional year? The traditional training grounds of the banks are gone. Even without considering the cost to an adviser of supervising an ‘apprentice’ who will be willing to be responsible to ASIC for that supervision. More regulation. So, FASEA will result in an adviser exodus & a huge barrier to entry for new advisers. The numbers don’t work for anyone. No doubt change needs to happen, but it needs to be practically viable. Not something dreamed up in an academic vacuum with no reference to reality.
Let alone the increased cost of compliance and regulation = more cost to the consumer.
Thanks Peter, well stated and exactly what a large proportion of planners are feeling. We’ve become the victims of systematic and systemic bullying, harassment and unfair work conditions that would not be allowable or tolerated in any other non-politically charged profession or workplace.
If all the other vocal minorities can successfully push in Canberra for all the changes (some utterly absurd) in how different groups are treated, surely our supposed member associations of FPA AFA can do more.
These bodies are way too conflicted to do anything for advisers
Now I know why my previous post on the other Peter Johnston/AIOFP post wasn’t published. It’s IFA/AIOFP/Peter Johnston week. The industry must be giddy with excitement that all will be good from now on. I’ll publish this on other trade sites, but here was my previously unpublished post, just in case IFA non-freedom of opinion moderators have a moment of ethical clarity.
“James,
I’m surprised Peter Johnston ever gets quoted after his ”Jack Flader” is an honorable man comments, let alone an association would let him speak on their behalf. But hey, gives me a chance to comment.
But Jack you are right, Peter Johnston is at best clutching at straws. If anyone thinks that any political party will be listening to (let alone aligning themselves with) financial planners / financial services or even the banks in the current environment, they are at best delusional. With the next round of the Royal Commission starting up again next week, probably not the time for Peter Johnston and the AIOFP to be wasting their breath.
Ask the average voter their concerns about FASEA they’ll most likely answer about being concerned about water quality, it’s not even a minor priority/concern for the average voter, they don’t care, and all the major and minor parties know this.
This time next year it’ll be Prime Minister Shorten, opposition leader ???? (Scott Morrison) and Peter Dutton no longer in the Parliament.
Enjoy the rest of the week.”
Emailed my local standing Liberal member today and told him if FASEA goes ahead as planned I wont be voting for him.
He won’t care, he’ll get more votes in this environment kicking the banks, financial services and financial planning than attempting to appease an angry, uneducated financial planner seeking attention.
Great to see an article bringing up some of the problems and angst that all of this is causing. I for one know of a few business owners who i might add have a perfect record who are suffering depression and uncertainty since all of this started. You need more articles like this one and hey why not look into what litigation might be able to be brought forward too.
At least this story by Peter is accurate ! will anyone take notice ? will we fight ?
That is the problem, they know we wont stand together and fight, they know the representative boards are to busy looking for their own financial gain and not what the members really need. Till advisers get together as a group instead of what ever it is we have now they will get away with it all and no one will stop it.
FASEA is a 2000 pound gorilla on training wheels.
Over Complicated ODwyer and her FASEA goons showing their utter arrogance and disregard for any real industry acceptable approach.
At the very least the time lines need to be extended, we have lost a year plus and still NOTHING definitive regarding university offerings and nil in preparation for that !#@$%^& exam.
HOW about we load O’dwyers electorate and ensure she has NO JOB after next election.
Agree with Peter Johnston and AIOFP but sadly we do not have a united voice to represent advisers and that is why we are in the dire mess we are in today. Our other so called “representative” bodies have let advisers down big time for too long- FPA AFA particularly- looking after their own self interests instead of their members interests.
It would be good to have a co-ordinated approach to tackling this ridiculous situation.
Wouldn’t it be easier if the industry bodies all worked together rather than stating that advisers should be the ones working together? The personal agendas of the FPA, AFA and the AIOFP are creating more fraction than good. Surely we are all after the same outcomes, get past your egos and get a better outcome for us all. The message here is right, the execution is nothing but hot gas.
I wish the FPA was this forthright with views on FASEA – maybe they see the revenue in all the courses they will provide – then again they may be a white elephant if the CFP/DFP isn’t recognised – Kelly O’Dwyer and the LNP are classic virtue signallers – we want to service our clients not study more – we do enough study with 40 hours of CPD and previous qualifications we have obtained. I am turning 50, have done an accounting degree, DFP 1-8 and the full 5 unit CFP course – no complaints in 20 plus years of advising – why do I need to go back and study?????? Its a joke.
I am the same as you – Masters of Financial Planning, Associate Dip in Accounting and DFP 1-8 and SMSF Association specialist – exams all the way through my career with CPD hours well above the 40 we have to do and 50 yrs old this week. No complaints either. I have children 9 & 11 and a business to run – why do I have to study?
Thanks of calling it exactly the way it is Peter. Some of our industry representation are merely fiddling around the edges. I am mentally struggling with the educational mountain I need to climb and I am sure I am not alone. I find it odd that I have 25 years of experience and I am being told that counts for Zero. It is like asking the General of the Army to go back and do basic training. When will common sense prevail?
Whilst I agree some tweaking of FASEA guidelines would be good the attitude of the AIOFP would take us into more unwanted confrontation and mockings about the old school. We have to be above that.
Thankfully someone is taking some initiative in this regard. Where is the AFA that allegedly represents advisers?
I’m sick of being told that Labor will be worse for advisers. For the first time in 40 years I won’t be voting Liberal.
The question is “following the Royal Commission, would Labor be any different?”
No – I don’t believe they would be, and may even be worse. After all, they are intrinsically linked with industry super, who view IFAs as ‘the enemy’ and a threat to their stranglehold on the trillions sitting in super. There will be no better outcome for our industry under a Labor government, and I’m fairly certain that’s what we will have after the next election.