Appearing on a new episode of the ifa Show, founder and CEO of WOW Women’s Group Tracey Sofra said prior education not being recognised by FASEA, which has been widely criticised previously, meant advisers, particularly older planners, opted to exit the industry.
Currently, existing advisers with no degree must have an approved qualification by 1 January 2026.
“Even people like myself who [were] told that I had to do this exam. It was like, ‘What? You’re kidding me, right?’ I’m degree qualified. I’ve done my CPA. I’ve been in business for 27 years. You want me to do what? I kind of got offended,” Ms Sofra said.
“… there’s been so many advisers that I know… they just couldn’t bring themselves to sit for that exam. I mean, it was a tough exam. It really was.
“And it wasn’t about knowledge. It was around, ‘what would you do in this situation? What would you do in that situation?’ So it was more around, I guess, the ethical conduct and making sure you’re doing all those right things. So it was quite strenuous.
“So those people who sat it and didn’t get through and those people who just didn’t want to attempt it are out of the industry.”
Late last year it was revealed that the number of Australian advisers shrank below 19,000 late last year and is predicted to reach 13,000 by the end of 2023.
In January, FASEA was wound up and its responsibilities were passed to ASIC.
The current education requirements have been criticised by a number of groups within the sector, including the FPA, AFA and The Advisers Association, with CEO Neil Macdonald saying the industry will experience a “mass exodus” by 2026 if changes are not made.
Listen to the full ifa Show with Ms Sofra here.
Do we place too much value on a degrees and education in this country? Yes. Are the education standards a contributor to advisers leaving the industry? Yes. Is it the main reason? No.
Over regulation that doesn’t make any sense due to too much say from those that have never worked within the industry and don’t understand it is the major reason people left. The exam was a stop gap for some that were always going to leave anyway and there are a fair few that have left or plan to leave before the full education regulations kick in. Realistically though, those people would have completed the education requirements if they believed in the industry and the direction it was headed.
I for one had/ have no confidence in the industry direction and that was my main reason for discontinuing.
Declining numbers is not due to FASEA more so bad regulation. Who would want to operate in an environment where the regulator is so anti advice. Fines ranging from $50,000 to $100,000 for a defective FDS where defective includes the definition of a spelling mistake does not encourage you to stay in the industry.
I have degrees in both commerce (accounting) and economics (finance) and advanced dip.fp as well as a masters degree. I was an award winning adviser. I left because of the attitude, the disdain, with which the government treats advisers, this has been going on for years. I’ll do something else thanks. I’m in my late 30s, it’s not too late to find a new path and be treated with respect.
You’ve got a CPA, well that’s not a relevant FP qualification that’s an accounting qualification.
The reason people are leaving the industry is they don’t want to help turn this industry in a profession. The lead in time was more than sufficient
Professionalism is not just about a piece of paper. It is also the way you act, how you treat others etc
That is 100% correct, however an integral part of being a profession is the “piece of paper”
The FASEA exam would not be in the top six issues causing people to leave. It wasn’t that hard and you had plenty of time to do it with lots of people willing to take your money to help you pass it. Anyone who left because of the FASEA exam was leaving anyway
education has nothing to do with why advisers are leaving, look at the double standards from ASIC, AFCA,FPA, AFA etc , (loojk at how easy the big end of town got off on things) look at the risk that advice that was on the mark 5 years ago can now be seen as wrong as advisers sued, that’s the issue. This is just grandstanding by another wannabe so-called “leader” of the industry.
Doing the exam is not the problem. The actual exam content is the problem. It is a mickey mouse exam designed to trip us up. Note the 48% fail rate in the November exam. That in itself tells you something.
The only thing it tells us is that those who left it to the last minute hoping for a reprieve (in terms of having to sit the exam) opted to write the exam in the knowledge if they had written and failed they’d get a few more chances in 2022.
Yet the pass mark for those that did the first exam was 96%. The first group had no training, no practice exams, no study sessions and no idea what was in the exam.
A 48% fail mark tells me that some people have not taken this seriously enough.
I’m 57 with 30+ years experience, completed the exam, and will complete the degree requirement this year. So while utterly irritating, education [b]has not[/b] been a stumbling block for me – excessive red tape, opportunistic litigation, and remaining competitive/relevant to consumers are the urgent challenges facing the industry. Please, let’s pivot the conversation towards positively addressing these critical issues before its too late.
Spot on!!!!
Instead of an out of touch regulator with career public servants in most roles (or those who couldn’t “do” in the real world now choosing to “teach” ie regulate) pretending to protect consumers by establishing ridiculous rules, policies and documentation – most of which has no benefit whatsoever for consumers or their outcomes – why doesn’t the government actually ask consumers what they want from their financial adviser or services provider, how they want it and how they wish to be able to pay for it? A novel idea I know!
Exams equal Knowledge. False.
Degrees equal Professionalism. False.
FASEA Code equals Ethics. False.
AFCA Fairness is Fair. False.
When you build houses on falsehoods, they always crumble.
Experience equals competence. False.
There are many mid-career planners who *did* pass the exam who are leaving the industry. Exam just a temporary inconvenience. Constant regulatory meddling is not. Professional associations weak.
Spot on. How is it possible to enjoy a career where the regulatory goalposts keep getting moved on the basis of political convenience and the outcomes for the industry keep deteriorating as a result?
Absolutely agree.
I sat the exam, passed first time. Thought it was a ridiculous exam, not testing what is actually relevant. It made me really angry to know that many really good advisors I know failed.
I have left the industry for the time being, doing other things. But am happy to come back, finish the study etc., if it turns around so that I am not effectively a terrified form filler, thinking I am about to be sued and working for minimum wage when all is said and done.
Meanwhile, the bottom line that everyone skirts around, talking about education and regulations, is that Opt In has killed the industry. Everything else just pushed things over the cliff.
Spending one’s time justifying fees in multiple ways rather than actually getting the job done. Charging a fair amount and providing a fair service was not enough. An advertising campaign by the government simply saying, “Have a conversation about fees with your financial planner. Be sure you know what they are” would have been enough.
It not about the advice anymore. Compliance overload is running the show. Trying to tick all the boxes and having to comply with non-efficient rules and regulations, why trying to stay profitable. Fine if you only look after the rich. Some of us actually deal with real people and not millionaires.
It’s a failure of those bodies that are paid to Advocate our behalf. Those Associations like the FPA that put their own needs ahead of Advisers, more interested in their relationships with insto’s and large super funds where there members are drawn from. Too focused on establishing third party partnerships with Uni’s or putting another feather in their cap by getting themselves placed on FASEA boards. Advisers trusted them but we were fooled into thinking they represented Advisers when in fact they represent all industry participants.
An issue is that Tax payer funded Universities never saw Financial Planners as a viable market, hence Advisers were always[i] forced to the Private Sector [/i][b][/b]for their ongoing learning and CPD. Courses with no AQF standing such as Aged Care Steps, Kaplan Short Courses. [i]The real failure was this lack of recognizing prior experience [/i][b][/b]and the failure of the University Sector to design suitable courses. What is morally and ethically wrong is those that are paid to represent Advisers failing to recognize, communicate this and allowing institutions to use Advisers as scape goats for their crimes. As a result we got FASEA’d.
Couldn’t have put it better myself. The FPA is a disgrace and should be called out for the heavy role it played in the loss of over 10,000 financial planners and 1000’S support staff. They are only in business because they monopolised the CFP designation. I was a CFP for over 18 years before I resigned in disgust.
Agreed. I left the FPA years ago. Their fees for very little, relevant services could not be justified in my view.
The main problem I see is that these bodies are nothing more than a business to business supplier of services. Clearly now only Interested in themselves, selling and expanding their own services, including PD days, conferences, CFP branding etc etc. Certainly not a Professional body and lost it’s status as an industry association. $1,000 a year is a lot of money for a three letters after your name and the occasional webinar of value and selective Advocacy that really only benefits themselves.
If a new entrant into financial planning has to do a full Bachelors Degree of 24 units and an existing adviser only has to do between 5-8 units depending on their level of existing education quals, do you think that is recognising prior experience or not?? Getting at least two-thirds of a full degree workload effectively exempted seems like a massive recognition for prior experience & qualifications, but then I guess I’m a glass 2/3rds full type of gal !!
I don’t understand why this is still a discussion point.
The standards were set. If you’re not up to the task of meeting standard, then you’re not up to the task of taking the responsibility that is expected of our profession.
If you couldn’t figure out the correct answer in a challenging ethical scenario how will you possibly cope with a challenging scenario for a client?
Just because you’ve never crashed on the highway on 25 years of driving, it doesn’t mean you’re a good driver who should be handling a race car.
Get on with the advice that Aussie are seeking – and let the pendulum swing back, as it will.
It’s been 20 years of constant pendulum swings to more and more BS REGS.
Is it enough that most people who need Advice cant afford it ?
How can you get on with the Advice that “Aussie are seeking” when 85% cant afford it ?
Its not just one issue causing the reduction of adviser numbers. After 20 yrs of being a planner I have to say I’m finally sick of fighting up hill every step of the way. Unfortunately both clients AND advisers are at the bottom of the food chain and lets not forget the role the media plays in portraying the planning industry as a just a bunch of rogues. At a time when the Australian superannuation system has never been bigger, we have a reducing number of planners and overall far less planners than the Australian public should have access to . . . a monumental failure of policy and forward planning. I will be out before long and really feel sorry for the Australian public.
The compliance and red tape nightmare is the reason why most advisers have left, and why many more will continue to leave. Why bother with the exam and education standards if you don’t see a future in this industry? If financial planning was a viable and enjoyable career, many more advisers would have sucked it up and done the work.
100% correct Giggity, as usual!
And what about all the people that have industry experience but spend thousands of dollars and got degree qualified? Sat an exam and passed? They can’t just change the rules now or there will be a class action law suit to be reimburse for the collective mowny paid for degrees and the lost productive times of weeks worth of study and exam sitting.
The rules were set and 6 years was given. Then an extension of another 2 years. If advisers refuse to meet education standards they need to leave.
“Can’t bring themselves to take the exam”…what if those same advisers could bring themselves to compete CPD, write files notes etc? Should they still be advisers?
A bar needs to be set. It’s been set. Meet the new standard or don’t
35 years of continuous employment in industry. Continuous CPD. 8 years as a planner. DFP and FChFP qualified (along with countless courses and training) and I’m still not being recognized (4 units of a degree required at the cost of over $10,000).
I will exit in 2026. I’m fed up.
I’ve had enough together with the threat of losing your home or criminal charges if I happen to make an error.
The industry is stuffed. All the pressure just ain’t worth it
The industry is being dictated by politicians who only listen to hard left consumer groups who have never actually had a financial planning experience.
Australians certainly won’t benefit from this red tape.
Agree with this – the role of a FP is rapidly becoming untenable. I will be leaving before 2026 after 32 years in the industry. Risk isn’t worth the reward.
Yes indeed, well expressed to both advisers above. After 36 years I am now out as of last Dec for exactly those reasons detailed above. Sad for me AND my loyal clients. I had at least another 10 years in me. The ill conceived, deceiving and ridiculously contrived FARCE-IA ‘exam’ certainly made the decision easier in the end. As usual those responsible in Canberra keep their jobs, we lose ours or at least the constant threat of losing them and the clients get the raw prawn. Business as usual for self obsessed public ‘servants’. Good luck out there, all.
i applaud your stance. well done. walk away.
Only 4 units of a Grad Dip instead of 24 units of a Bachelors Degree seems like you ARE being recognised
allow the mass exodus. governments and governments departments don’t care. if advisers are silly enough to stay in this profession and put up with the stress and high costs, let them do it. i exited some tome ago and i have had a successful exit strategy. some advisers are too scared to leave – they don’t look in the mirror and realise they have good skill sets to start alternate businesses or occupations because they are too bust complying with the governments and ASIC requirements . EXAMS are NOT solely the reason why they are leaving.
Good commentary and some good responses particularly now for highly experienced advisers in flood affected regions on the East Coast, if for whatever reason they have not passed their FASEA exam they face a extremally uphill battle to retain their job
If they’ve left it til now, then there’s no real sympathy. Quoting the current floods is just an excuse that rates up there with the dog ate my homework…
Way too late for all this hot air…the horse has bolted…its water under the bridge…the ship has sailed…the train has left the station…too many moons gone by etc etc…..
Why don’t all the ministers and shadow ministers in politics both federal and state have degrees in the ministry portfolio they are in full charge of? Shouldn’t that be a priority requirement?
[b]AND make them[/b] do a pointless and contrived so-called ‘ethics’ exam or they lose their livelihood of decades plus. Then see if they can recognise the idiocy with which they have enabled the current system!
the whining continues…… we just act like we are in the military and do what we are told, FASEA exams, AQF8 study. It’s the only way the Industry will become Australia’s newest profession. Those who can’t be bothered stepping up should rightly step out. Lots of things in life are hard and that’s good – it creates a high barrier to entry. just do it and stop embarrassing everyone with the never ending whining
Delightful comments – hardly professional!!
Suggest you get off your high horse and appreciate the difficulty this whole process has caused some!!
I believe the government had to be seen to “weed out” financial advisers.