Over the last 12 months, the financial advice sector has come under heavy attack from the mainstream press, driven largely by a string of scandals at bank-owned wealth divisions. Whether or not this negative publicity has tainted the entire advice industry is a matter of debate. But one thing is for certain – the ongoing royal commission into financial services is only showing one side of the industry. The other has hardly been reported on at all.
Melbourne-based financial planner Pamela Anderson has worked in the financial services industry since 2006. Today she is the director of her own business, Beyond iWealth, which employs a number of female staff.
In a recent letter to deputy opposition leader Tanya Plibersek, Ms Anderson outlined exactly what her life looks like as a financial adviser, business owner and mother staring down the barrel of FASEA’s stringent new education requirements.
“I have a young family with two daughters aged six and three,” Ms Anderson said.
“I started my practice when my youngest daughter was still being breast-fed and would bring her with me on appointments for feeding. She usually slept and the clients rather enjoyed a cuddle. Both my girls have many surrogate grandparents, aunties and uncles as a result.”
Like many of her peers, the Melbourne-based adviser is concerned about the proposed FASEA education standards. Along with fellow advisers Phillipa Hunt and Halle Yilmaz, Ms Anderson believes that female advisers with young families could be forced out of the industry if they are required to dedicated significant amounts of time to meet the new regime.
“I am already stretched with looking after my young family and operating a young business,” she said.
“I employ female staff. I provide pro bono advice to women who are leaving domestic violent relationships or facing financial hardship. I have a lot of lawyer friends who send them to me as they simply cannot sit and talk to a man.
“If I am required to dedicate 15 hours of study a week I would have to make my staff redundant, but I could still stay in the industry. I would seek to reduce my cost and sadly my support staff would be let go in favour for possible low cost off shore replacement.
“I would be devastated to lose my staff as they are brilliant workers and I am very passionate about keeping jobs in Australia. To seek support off shore would be against my standings and sadly reducing Australian jobs. I would also have to stop the pro bono advice for women as I simply would not be able to afford the time on not revenue producing advice.”
Many of her fellow female advisers have told her they simply would not be able to continue in their chosen profession.
“The demands of young children, family, work and the reduction in income with the continued cost of child care make it impossible for them to remain in the industry,” Ms Anderson said.
“The tragedy of this is that these women have very loyal clients who would be extremely upset to lose their adviser. They are great advisers who have experience, knowledge and skills. They have worked hard and now they face the reality of giving up their dreams due to unreasonable timelines.”
Over the course of her 12-year career in financial services, Ms Anderson said she has seen the advice industry struggle to attract women to key roles. Many stay in support roles despite their desire to become qualified financial planners.
“Over the past 10 years, I have been delighted to see more women join the industry as advisers or progress their career to become advisers. I followed this path and absolutely love the job I do, helping people is the most satisfying job in the world,” she said.
“The financial services industry needs to continue to evolve as we pioneer towards becoming a professional occupation. It is, however, the people in the industry now who are imperative to this success.
“FASEA can be the greatest change in the industry if implemented correctly, if not it could be the sole contributing factor to the demise of the female adviser and a key contribution to the continuation of the pay gap.”
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[quote=FASEA is tough but a necessity]FASEA is a huge commitment but will be worth it – I encourage Pamela to get on with it. Chip away at it,[/quote]
I encourage you to listen. Stop grandstanding and virtue signalling and understand what is being said. It’s complete sucks like you that have ruined this industry. A masters doesn’t make you a good planner. Your practice is and I guarantee it is, overcharging clients that were hoodwinked by your smoozing and overselling of what should be a simple cost effective advice process. But no. It’s people like you that has raised compliance cost and jeopardise families and planners who don’t have the time, patience or ability to undertake pointless education courses that WILL NOT HELP the adviser or client one bit.
Now go and stroke your ego somewhere else and maybe listen to people instead of your own “oh I’m so perfect” grandstanding. Pinhead.
Sense will only come to FASEA when the life offices become concerned about lack of new business and pressure the Government. That will only occur when APRA decides to truly investigate the capital adequacy and solvency of “actuarial sign offs” for those life insurers who dabble in GROUP and non-underwritten DIRECT Policies, while their fully underwritten NEW fresh risk business, that used to be provided by specialist risk advisers, disappears down the drain.
Last month a 38-year-old intra-state truck driver client, who had just weathered seven weeks on reduced income after some minor remedial surgery on a foot, had a stroke while having coffee at a café. His IP cover was in an employer scheme: his life cover was in his old superfund and nine years ago I helped him obtain trauma cover to match his then mortgage: in 2009 his industry fund super would not add TPD cover because of his occupation, so I worked hard to obtain that TPD cover from a retail insurer, after a lot of effort.
Now the employer GROUP IP had refused his claim for the foot surgery, just before he had the stroke.
The GROUP insurer won’t talk to me about his IP but I was able to convince his retail trauma insurer to quickly process a trauma claim for the stroke, because of my well-developed communication skills and my presentation of the facts in persuasive arguments. While that trauma claim was processing, and while he was dealing in great stress with the group insurer on the new disability claim , I had to act as his financial advisor, his coach when dealing with the group IP insurer, as his social worker and as his psychologist, for the client and his nonworking wife. Ethically I can’t charge a fee for that service and practically he would never be able to pay the fee, at least until the trauma benefit arrived.
My only financial reward, if it can be described as an reward, was a miserable $90 per annum renewal commission, from which I’ve expected to fund bi-annual reviews, fix up bouncing credit card deductions, and be available to answer general questions in the financial world
Only specialist dedicated risk advisers provide this level of service! Fee based advisers would not want to waste their time
Who is going to provide that level of service, when 50% of experienced risk advisers will go out the door, hounded by LIF reductions in commissions and un-realistic one-size-fits-all FASEA education requirements. Who is going to persuade the client to keep paying his premiums for his other insurance when the sting of a reduced income on an IP claim hits home? Will life insurers take on more staff to provide the services previously provided by specialist life risk advisers?
Departing risk advisers will now not get full value for their business, generated from years of hard work. And every experienced risk advisor understands there when a new advisor takes over an old book, if the departing adviser is not involved in the transition handover, then 25% of existing business will fall off in the first year. That’s a fact!
This is stupidity of FASEA and the way it was established, courtesy of Kelly O’Dwyer – apparently even the new Minister has discovered that he has little influence over FASEA. The obvious answer is to quickly introduce enabling legislation to extend the cut-off date for FASEA and develop a whole new set of FASEA requirements for risk only advisers, as proposed by Don Trapnell of Synchron.
I think we have six months before that exodus commences.
FASEA may be appropriate for those who claim to be planners, but is too “tough” for specialist risk advisers and a complete overkill for a problem that does not exist.
what you raise is very important, but it’s too late now. and I also applaud your dedication to your client.
unfortunately, we will go the way of the legal profession. everyone knows only rich people have access to and can afford justice. the others have to go to legal aid. and that is essentially the future for financial advice.
the well to do will be able to pay for and access financial advice, the not well to do will have to do without.
i hear you, but, the job to make financial advice affordable to the consuming public is not our responsibility. our job is to provide good quality advice competently. that is very expensive to do and as such we have to pass that cost on to the consuming public.
if the government thinks it’s inequitable or this disadvantages lower socio-economic groups then it needs to be dealt with from a policy perspective, such as making the cost of financial advice tax deductible.
my fee is going up 1 Jan 2019, to keep up with the increasing costs. and, i will have to decline providing advice to many many people who deserve it, but cannot afford to pay
FEASA is necessary, the i[b]ssue[/b][u][/u] is the time presently allowed to complete all requirements. Given the original time frame promoted and the inaction of FASEA people to publish anything meaningful to date- common sense- I know lacking at all levels )) should dictate extending the time frame by at least the equivalent of time wasted so far and even a bit more to allow for both genders to complete the requirements. Like past moratoriums, make enough noise and cracks may appear for the better.
Surely a ‘millionaire mum’ could afford the cost of the changes.
You’ve had 12 years. Get over it. If she’s like most Melbourne based advisers I’d say just sell the BMW and hire a Nanny. (yes hate me now). With those constant stream of clients in Large Cities just charge the next client $20,000. Any adviser working in the industry for more than 5 years should be able to pass financial planning subjects without actually reading any material. University courses are all ultimately written for 18 year old foreign full fee paying students.
I say “get over it” because the time for action was 12 months ago. It’s too late so move on people.
This is just a money making exercise now for Universities, the Government has stepped in and over regulated and FASEA is the financial advice industries penalty for lack of self regulation and generally not giving a $@#@$, being licensed by product manufacturers, having professional associations ruled by large banks.
or your expensive collection of fountain pens. drat, i was just about to add another few, i’m going to have to cull my collection
Well, I’m very sympathetic and I’m sure that Mr Anderson is a very decent person, but she hasn’t outlined what qualifications she has that make her fit to practice in the area. Is she a Chartered Accountant or a CPA perhaps? Perhaps she has a degree that doesn’t quite fit the requirements and the gap can be made up. However, the advice Ms Anderson gives can affect peoples’ lives in the most fundamental way. Requiring practitioners to be able to demonstrate that they’ve formally acquired a relevant body of knowledge isn’t unreasonable in my view.
As a consumer of these services, I made sure that my adviser is properly qualified. However, I have a financial background and I can make a judgement on these matters. Other consumers may not be a in position to judge and they deserve protection. It’s sad, but the poor performance of the industry in general has led to this outcome.
Social media trolling for the unions is hardly a “financial background”, “Glen”.
a quick search indicates she’s only qualified at the diploma level
Well done to Pamela, Phillipa and Halle for speaking up and demonstrating the real value that Financial Planners add in everyday life.
I would add single parents (male and female) suffer similar headwinds juggling a business and all the pressures of single parenting, both time and financial. Whilst I feel the motivation behind FASEA and the increased education is prudent, the implementation has its obvious challenges. The government seems to be quite disconnected with the broader advice community, but that is nothing new.
FASEA is a huge commitment but will be worth it – I encourage Pamela to get on with it. Chip away at it, as a competent adviser she’ll find that a lot of the study required will just solidify concepts she’s already familiar with.
The reality is that any young adviser that has a young business, young family and passion to help everyone (not just the wealthy) is in a similar position. Like her I also employ a young mothers on flexible terms supporting their return to work and development in the industry should they choose that path.
My wife and I agreed she would complete a Masters (about 5 years ago), we then started a family (we have a 2 and 5 y/o) and developed a young practice at the same time, bought and fitted out offices etc.
My wife has been a huge support to me over the last couple of years whilst I have been completing my Masters. We both work, parent two children without support from extended family and don’t have time to scratch ourselves. It is hard but that is what it takes. Especially if we want to be considered professionals and not just sales people.
When you assume you make an ass… you know the rest. Nut really, why do you assume passing the FASEA standards will be the end of it? History does not support this assumption. You may find yourself needing to update your outdated qualifications in 10 to 15 years time.
And what about the already very well educated my tough guy ?
Why do we have to re study what we have already spent valuable time & money doing ?
Surely with your Master degree you understand Economic terms like opportunity cost ? or not
Sounds like your wife’s Masters will be out of date from a FASEA perspective. I hope she’s ready to do it all again. Then by the time she’s finished it second time round it will be time for you to redo yours.
A high standard of education for advisers is necessary. The biased and incompetent bureaucracy known as FASEA is not.
I agree with Ms Anderson’s sentiments, as a adviser running my own business and as a mother we already wear so many hats; the juggling act day to day is dizzying. I am sure it is an unintended consequence of FASEA’s education reforms to further pressure female advisers, but whether it is intended or not the consequence remains. A more realistic timeframe to complete the education requirements would be a good place to start!
It is not just women being affected.. it is all people in the industry. There are no winners if 30-50% of planners leave the industry. I am concerned about the future, however saying that, there will be opportunities if you can survive. We just need some leadership and to stop the political point scoring.. we run small businesses and rely on clients staying with us. We just need some fairness and balance in how we are talked about.