In a statement, Connect Financial Service Brokers chief executive Paul Tynan warned that “time is not standing still” for advisers “waiting vainly for the return of the pre-GFC times and values” and need to make plans for their future.
“Baby Boomer planners are faced with regulatory and educational changes which are only going to increase as technology continues to disrupt traditional business models,” Mr Hewison said.
“Education standards, industry and professional accreditation exams and requirements are here to stay, and if a course of action is not taken whilst time is on their side, these planners will find the exit strategy being made for them.”
Mr Tynan said letting government or industry associations make decisions regarding an individual adviser’s exit will have an impact on their future employment, and that those considering a departure need to seek guidance.
“Time is not going to help in the decision-making process, what’s important is getting the right advice to aid the individual in the process,” he said.
Swinburne University announced there new course is on FASEA list. They can write only four new units out of 23 units in their Bachelor of Business program and get their brand new major on FASEA’s list and yet the person with an existing Bachelor of Business, Diploma of Financial Planning and Gradate Diploma in Applied Finance with four old financial planning subjects and countless privately offered courses and accreditations is not good enough.
It is only logical that some advisers will leave rather than select to study old material.
I suspect that, despite the shock and awe tactics from FASEA, what your seeing from Swinburne will be closer to the reality for many planners with existing qualifications. What you’ll end up doing will be more akin to a bridging course, that covers areas that are lacking from your original course, rather than a whole new degree.
Don’t get me wrong, this still doesn’t seem to be completely equitable, but its better than some of the ‘chicken little’ types are suggesting in their commentaries herein.
Your outlook seems to be “don’t worry, just relax, in the end common sense will prevail”. I once had that same optimistic outlook about financial planning regulation too. But experience has proven that common sense does NOT prevail.
That is why we have:
– A requirement to produce expensive long winded disclosure documents that nobody reads
– Opt-In
– LIF
– A legal definition of “independent” that is more hindrance than help to consumers
If we all just relax and put our faith in the regulators and associations you can soon add:
– Degree qualified planners being forced to go back to uni
relax, take it easy. they are not going to decimate an industry with such high intrinsic worth to the community. Let’s give the FPA and AFA a break. I trust them.
Lots of silly comments popping up now about the course fee costs of additional education being immaterial if amortised over remaining working years. But course fees are only a small consideration in many advisers’ decision to get out. The foregone revenue associated with time away from their business is likely to be a much larger additional burden on top of the course fees. There is also the social cost of time away from friends and family. For advisers who already made those personal sacrifices for their first (and in many cases subsequent) degrees, they don’t want to go through it again.
But FASEA’s assault on planners with existing degrees is just the latest in a long line of biased and vindictive measures indiscriminately imposed on large numbers of completely honest and professional planners who significantly improve their client’s lives. Many planners have grown tired of this never ending barrage, and are wondering even if they do make the financial and social sacrifices to get yet another degree, what’s coming next?
Selling up to buy a simpler business in another field, or retiring early with less income and less stress, is becoming an increasingly attractive option for many.
Well said. The latest education requirements are the thin end of the wedge. I feel battered and bruised by the amount we have had to put up with as financial planners over the years and all to earn an average income with above average stress.
Yes, they may come to their senses in time and ask for just bridging courses. But if they don’t do it quickly I suspect that due to our nature as planners, many of us will have thought our way through evolving into another line of work.
At age 60 and with 35 years experience I would be very happy to go to University and get the required units which would result in me attaining a degree in Financial Planning .
So the government better ensure that they can guarantee me a spot at the university of my choice,
which offers the appropriate course
After all , it would be fun to interact with younger students of the profession ,and maybe drink some beer and smoke pot between lectures .
What I won’t cop is some internet delivered study course which costs a fortune and which has put together by some faceless academic who can not be challenged in open discussion about the real financial world out there. Would have no problem at all doing the hours and continuing to practice .And i would not expect to have to pay , as i am in fact being forced to attend so my livelihood is not ripped from me
good luck with that
Dude, Hilarious. Younger students now take speed and ecstasy tablets between subjects. Drinking beer and smoking pot..that’s the 80’s and 90’s. Even worse for you, student learning is now predominately online sitting behind a computer. The ivory halls of academia are gone and replaced by keyboards. Good luck with your study… and your attempts.
Yep … no conflict going on here …
Create the problem, solve the problem, profit from the problem. When will the “real” conflicts of interest been called out regarding FASEA and FPEC members?
See Mark Brimble (Griffith University)
– Chair of FPEC and Professor at Griffith University – one of the largest providers of financial planning education – and architect of the 10 year clause in the FASEA guidance statement
In other circles, we would call this “vertical integration” …
Time for those on FASEA and FPEC with these direct conflicts to resign. Yesterday.
So what you’re saying is that no-one with any relationship to the either the education world can be a representative of the FASEA board. So we get no one with any related academic experience in the field designing the courses we are meant to study, because that’s a conflict.
In the same vein i’m sure you’re also opposing anyone who is a past or present financial planner/adviser having a position on the Board because they too would have a conflict of interest in making sure that they made the regulations sufficiently open for themselves and their mates, so that they wouldn’t have to upgrade from their 4 subjects of DFP.
It’s perfectly reasonable that Mark Brimble should not be on FASEA. Yes he should step down. There are plenty of other heads of schools, Vice Chancellors & other academics who could represent the University sector. Where are private sector education representatives? It’s a direct conflict as his employment, his income is directly linked and dependant on the number of fee paying students. The more students enrolled in his financial planning courses the more he gets paid. Whether perceived or actual it was too important an issue. If he wasn’t on there I’m sure many would not be winging. His appointment is doing nothing but harm. Step down now
So let’s get someone who lectures in medicine, engineering, architecture? Sure, they may be representing the university sector but what link does that have to financial planning?
Many advisers who suffer at the hands of ill informed decision makers imposing academic education over practical experience will opt to manage the business and not just sell out as valuations start to fall. The big problem with this strategy is the rising costs of running a financial planning business (like the TPB fee grab, the coming ASIC levy and many others to come) will see margins squeeze out profits to potentially scary levels, making it hard to cover the required income needs of both the business owner and client facing staff to replace them. A terrible outcome for advice professionals and the industry as a whole. A huge win for training organisations. In 10 years time, when Centrelink cannot cope because of the decisions being made now and people who need help have no one to turn to – the politicians of the day will be blaming FASEA and the brilliant thinking of those who came up with this crap.
“A huge win for training organisations.” Indeed, particularly University providers who set these standards!
I think “exit planning” is difficult when 80% plus of advisers leave the industry around the same time. If advisers think they can simply employ someone to run the business its going to be difficult. New young advisers have even greater hurdles to join this industry and there simply will not be enough of them.
Unless FASEA and the useless FPA and AFA start doing the right thing and recognising adequate qualifications for existing advisers in combination with experience and ongoing training instead of trying to make a fast buck then we are going to have a mass exit of advisers all around the same time who can’t sell their books, clients will have nowhere to go and the industry collapses (including the AFA and FPA).
Every adviser (including myself) that I have spoken with will not be completing these qualifications as they stand just for a few more years in the industry (and would end up having the same problems selling the business anyway).
I would suggest the FPA and AFA run a poll of members because they will be horrified by the reality of what is going to happen in 5 years.
Interesting that many would be willing to sacrifice their ongoing incomes of lets say $100K pa on average for a cost of say $20K in education expenses. Even if you only work for an additional 5 years past the proposed deadline, that amortises out to only $4K pa. Isn’t that how most planners rationalise the cost of IP cover & other protection to clients as a percentage of the clients annual income? In my example, for 4% of your income you get to maintain your pre-education deadline income for a further 5 years (possibly more) $20K gets you $500K. Isnt that worth it? Isnt that we tell clients?
It’s been said that financial planning & accounting practitioners are the worst at actually paying for advice, which is ironic given that we live or die by the willingness of clients to pay for our advice. The level of whinging about these changes just goes to prove this fact.
It’s not just about the cost of the courses. It is also about the time spent studying these courses when after 20 or 30 years in the industry and numerous other courses completed that advisers
expect to be winding down not up and rightfully so. Time spent studying is quality time not spent with family or seeing clients and for many of us it is just another kick in the guts to professional planners trying to do the right thing.
The Govt, FSC, FPA, AFA, ASIC, Choice and Industry Super have stuffed this once enjoyable industry by either making ongoing changes every few years or in the case of the FPA and AFA by sitting on their backsides while the the industry is being decimated.
At least 50% of existing advisers at least will not be here in 2024 if you believe the IFA poll of over 10,000 advisers. over 90% will leave if you believe that poll.
What other industry would put up with this ongoing crap and interference. Not one I can think of.
What you don’t take into account with your comments above is that it just might make sense to sell up and get a slightly lower paid job with no stress and enjoy life. Sounds attractive!
That’s a choice for everyone to make, whether they run a financial planning practice or teach at a school, sell clothes at Katies, whatever. They all have their own different demands and stress levels. I dont care what you do, go on leave, more business for those that spend a bit of time, invest a bit money and reap the rewards of both.
I suspect the advisers with degrees older than 10 years will be fine. FASEA will back down on this – even the FPA are running for cover. Don’t worry until we know more.
Yep FASEA should back down. But don’t count on ODwyer, she screwed us with LIF, she totally over Complicated Super reforms and now she will gladly screw advisers with FASEA.
ODwyer is a disgrace.
No doubt the six month consultation period can be used by FASEA and our associations to squeeze out of an embarrassing position where there appeared to be no consultation. Now they waste time and money on intense lobbying that could have been avoided. Grade one stuff.
The lack of definitive information is akin to a slow growing cancer. Submissions are open till mid year re education and that will take six months to digest.No one questions the path for new advisers- those needing further education have a “” cloudy answer “”, its the ones with AQ7 and above that are in limbo. It appears that no one is listening and responding responsibly–> FASEA WTF are you doing or is the job just too big for you. And yes, we will not be subdued, there is no law stopping current advisers employing staff to give advice and guide from a management level.
FASEA tried to respond to the ‘lack of information” issue by issuing guidance for existing planners in Dec 2017. For advisers with no degree training already, this actually gave quite clear guidance, and a surprisingly easy Grad Dip pathway.
Unfortunately at the same time FASEA made things much less clear, and potentially much worse, for advisers who already have degrees. FASEA’s role is supposedly all about raising professional standards. Yet their current approach will drive out large numbers of the only people in the profession who already have high levels of both education and experience. This will be the worst possible outcome for consumers.
FASEA cannot wait 6-12 months to resolve this potential disaster they have created. It needs to be fixed right now.
Most of the advisers I have spoken to or know, who are affected by this, will NOT be retiring/selling their businesses just because they do not have the education.
One of the affected advisers I worked for said that he was going to continue to run the business, and be behind the scenes “guiding” the younger advisers he would hire and give an Authorised Rep status to, he would not directly giving advice (Adviser being in his mid 60’s when this was said over a 2 years ago).
In essence, what is probably going to happen is that the new advisers will be groomed to give the advice by the experienced adviser, who will manage the business. This is a positive step, however, at some point these younger advisers will need to be given the chance to do their own thing and advise without someone looking over their shoulders, meaning succession at some point in time…whether that is agreeable to younger advisers (As they could quite possibly have someone looking over their shoulder for 10 years), is another matter entirely.
I think a lot of advisers will think the same however how can a non authorized representative/principal receive fees? not sure how asic views this as fees can only be paid to authorized representative or company with authorised rep principal. This is a can of worms, perhaps formal agreements should be implemented earlier than anticipated. How many young advisers have the resources to purchase equity?
Gosh. No, a person who is not an R/AR cannot receive personal advice fees. That’s a dumb question, otherwise any Clown in the circus would do so and there would be no need for licensing. Strictly, the AFSL receives the fees in the first instance – always. Any shareholder can receive a company dividend, for example where Advisers in a business have done the work. Not a can of worms. Not many young Advisers have a lot of capital one would imagine.
It will probably be a case of they will be a consultant to the business, and sit in on meetings without actually giving advice, just steering the new adviser in that direction. Have to wait and see.
Agree also that many young advisers do not have funds to purchase equity, and may not be offered it either, as some of the independent and smaller firms want family succession, even if other family members aren’t really that interested…seen that happen too.
You raise an interesting point. As I understand it, fees are paid to an AFSL, not an AR. So no problem there as revenue can be distributed internally any way they like once received by the AFSL. But the AFSL must have a “Responsible Manager”. ASIC requirements for a Responsible Manager include both relevant education and experience. The education requirements are currently nowhere near as draconian as FASEA’s. It will be interesting to see if ASIC upgrades Responsible Manager education requirements to align with FASEA in the future.
If they do, then experienced planners who decide not to upgrade to FASEA education level would not be eligible as Responsible Managers for their AFSL. But neither would young graduates, as they wouldn’t have the necessary experience. Unintended consequences? Or part of the broader plan to drive consumers away from licensed financial planners into the arms of property spruikers and junk insurance?
Sad thing is that it’s not just baby boomer advisers that are threatened by the FASEA changes- it’s degree educated, experienced practitioners whose qualifications are older than 10 years that targeted. So on top of all the change imposed on advisers, we now, as an industry, need to deal with a massive brain drain..
Enough is enough..
Get onto your federal MP now and list your qualifications, degree, experience etc and ensure Your member has a meeting with ODywer to voice the absurdity.
That’s what I have my MP doing and they await a meeting time with ODwyer.
But also never under estimate how disgraceful ODwyer is. We should also get rid of her.
Yep, next election we all enroll in her electorate, vote her out and then go home. Probably nothing will change but we will have the pleasure of seeing her out of a job
I commented on this above and the point is even more valid for any adviser in this boat. Your comment assumes that they are anywhere between 30 & 45 depending on whether they did their degree straight outta school or later on. In that case they have anywhere between 15 & 35 years left to practice depending on their particular retirement age. Using the same income levels of $100Kpa and a cost of $20K for the study, this amortises out to be only be between $600 – $1300 pa for a continued income of between $1.5M – $3.5M over that time. Tell me thats not worth doing a bit of extra study for…
The point is why go back and be forced to study old knowledge. I’ve studied super 101 two @#@ times already and 1) the uni is not around anymore and 2) another one is 10 years old so it’s not going to be on FASEA list.
To me, the numbers above are the ‘why’. My attitude to the changes and how i decide to focus on them is what matters. If i think it’s pointless, like many on here are whinging about, then i wont do it and achieve what i want. If it costs me some time and money to continue doing something that I love and something that rewards me handsomely (my numbers are double what i’ve used as an average), then i think it’s worthwhile.
That said, instead of just whinging on here, i’ve also taken 30 minutes to write to my local member & FASEA to propose an alternative framework based on existing qualifications and length of experience. Currently the draft regs dont differ between someone who’s done the most basic course to get authorised and 1 yrs exp & someone with a Degree or better and yrs & yrs of experience. My proposal doesn’t offer carte-blanche exemptions for all advisers. That is never going to happen with any govt, and will definitely not happen if those idiots from Labor get in next election.
Proposed framework is:
Advisers with a Degree, Post Grad Cert or Dipl, Masters in Accounting, Commerce, Economics, Finance, or Law PLUS 3+ yrs exp = exempt from any further study.
Advisers with a Degree in Accounting, Commerce, Economics, Finance, or Law & less than 3 yrs exp = Grad Cert in FP (max. 4 subjects)
Advisers with something less than a Degree (Dipl or Adv Dipl FP) PLUS 5+ yrs exp = Grad Cert in FP (max. 4 subjects)
Advisers with something less than a Degree (Dipl or Adv Dipl FP) & less than 3 yrs exp = Grad Dipl in FP (max. 8 subjects)
Feel free to copy and use/amend as a representation to your local member & FASEA. If you want something different to what has been released in the draft, get of your arse and do something. But if no-one does anything but whinge on here, then nothing will change.