In a submission to the Financial Adviser Standards and Ethics Authority (FASEA), the SMSF Association said if the education thresholds are too high under the new standards, particularly for existing advisers, this may “cause damage in the short to medium term for the financial industry”.
“An adviser exodus from the industry is a risk that is posed under this circumstance,” warned the submission.
“If advisers believe that the time, cost and effort to become appropriately qualified under FASEA’s pathways [are] too extensive it may cause significantly experienced advisers to exit the industry.”
The submission stated that it is advisers with the most experience who are most likely to leave the industry because of their proximity to retirement.
“Older advisers may be disenchanted by the fact their experience and accreditations are not adequately recognised, the amount of time and cost that will go into study and the fact they may be forced to restudy subjects they have met the learning outcomes for,” it said.
An adviser exodus, it said, also has the potential to lower the quality of advice given, as the remaining advice demand is met by advisers who have less experience.
“It may also result in a loss of experienced mentors for younger advisers. Furthermore, a lack of advisers may mean the Australian public’s need for financial advice is not satisfied as well as it could be,” the submission said.
The SMSF Association said FASEA should explore a framework for older advisers who are approaching retirement and to whom a degree and graduate diploma study are unreasonable propositions given the time and cost requirements.
“For example, one potential design would be to allow financial advisers who are 60 years of age or older as of 1 January 2024, have over 10 years of experience and have significant recognised prior learning to be eligible to undertake a bridging course rather than the formal studies for advisers without a degree,” the submission said.
“We would support arrangements as such with a caveat that these advisers would be subject to a sun-setting date by January 2030. This would see advisers continue practising until their retirement. If advisers wanted to consider longer term practising then they would be forced into the other FASEA pathways.”
I have to disagree with the comment regarding age and providing a “framework” for those over 60 by 2024. What is wrong with continuing academic education, I am 61, I have completed an MBA 5 years ago and I am well on the path to completion of a PhD, plus running an AFSL. I see no problem at all in pulling your finger out and just doing the hard work.
IF….. the importance of the career is to provide either a legacy business or a sale to provide for retirement then just do it.
What on earth is wrong with motivation and drive in advisers these days, it seems that we have all got fat and lazy, too many long lunches while watching the trail commission just come rolling in, well guess what…. NOW you have to work for it, as I will have to.
AND… Unlike a lot of other pussy advisers, I will put my name to this, Anonymous is just a screen for those who have opinion but are not prepared to back it up with their own name.
Rant over, enjoy your day…
Hi Stephen,
I noticed from your website’s CV that your MBA and PhD is in business administration. That’s a coincidence as my BBus degree was as well. I added a masters degree in applied finance and investment hand in hand with the AdvDipFS and DipFM, plus bridging courses for the recent TPB. I’m only 36, so please accept that whilst not doing a PhD, I feel that I can ask this with some legitimacy:
Will you be adding the new specific financial planning related university level degree to your studies as I am required to under the proposed framework? You’ll be in your late 60’s by that time, so I hope you’ll be using the next 3-4 years to study another degree to continue the right to advise clients after 2024. If so, that’s great, and I applaud you for having the foresight to do yet another degree for those years required after you reach your late 60’s.
If you are not planning on doing the new required degree, please amend your comment to read “I am currently doing unrelated studies that are akin to Basketweaving (as mandated by the FASEA board), and will in no way, shape, or form be doing this new requirement because I will retire instead”.
Should I, myself, continue providing advice, I’ll begrudgingly add another few years of study to what I’ve done, because I have a number of years ahead. However, to say that older advisers are lazy is disingenuous and snide at best.
Sick that FASEA have been around since 2017 if they had named the Grad Dip back in 2017 or approved courses which still hasn’t been done. Most planners would have been able to make the 2021 dead line to raise education standards. Why not set Higher CPD point standards and make everyone go under the same code of ethics. Let the existing planners enough time to get things in order before 2024.
Really sick moves being made by politicians. Financial planners businesses which they have work 20-30 years and are going to use for retirement. Now the value of these are going to be bugger all nothing if they are trying to get out now or before 2021 not to mention if they don’t pass the exam. I see a large number of planners avoiding the risk and getting out before 2021
Common sense, no so common among the bureaucrats dealing with these issues!
Legislation has already passed stating advisers must have a degree, whilst a sunset clause going out 2030 or some date makes sense it’s not going to happen.
There is no sense coming out of FASEA especially if for example you are risk only. There is going to be a mass exodus of advisers whether we like it or not. The average adviser age is mid 50’s and why logically would any spend $20,000 on useless qualifications just for a couple of extra years in the industry. New advisers won’t happen because there are better career paths to earn a living. The industry is pretty much gone in 6 years. Except for the few high net worth customers the masses will not have financial advice available.
Improved education standards are positive, however a sensible approach to implementing reforms seems to be ignored, especially by the so called experts charged with implementing reforms. Like everything else, the flow on effect is massive if they get this wrong.