Experienced advisers should not be required to retrain to meet proposed new education standards but allowed to transition into relationship management and mentor roles, according to Connect Financial Services Brokers, Principal, Paul Tynan.
In renewing his call from earlier this year that existing mature age advisers should be considered separately, Tynan said transitional arrangements for those advisers in the proposed standards would lead to many leaving the advice sector and that new licencing arrangements should be adopted to retain their skills and experience.
“We are not going to get 60-year-old advisers back into school, regardless of what the transition program suggests, but if they do not meet the new standards they will not be licensed, they will not receive ongoing commissions payments and we will lose years of industry experience when they leave the industry,” Tynan said.
“There is a better way which suits older advisers and the industry and that is to issue a new licence for ‘relationship advisers’ who work with clients to transition them to younger advisers who often don’t have the capital to buy books of business.”
“Good people could continue to work in the advice sector while helping other good people get on board without adding business debt as they do so,” he said.
Tynan added that advisers licensed as a ‘relationship adviser’ would be involved in mentoring, passing on soft skills and providing advice to younger advisers with these areas tied to succession planning and business sales over time.
“We are not going to get 60-year-old advisers back into school…”
He said these arrangements could exist outside the current licensing regime however they usually required complex legal and commercial agreements, which would be difficult to implement quickly to avoid losing older advisers from the advice sector. It would also prevent a flood of established businesses hitting the market.
“The normal sales process takes 12 months and few can actually get themselves to sale stage at present. It would be bedlam if they all came to market at the same time as it would force prices down just as the industry was also losing the years of experience of these advisers.”
He also expressed concern that industry bodies and licensees were not looking at this issue after he raised the need for a new licencing system earlier this year, claiming the latter did so out of vested interests around retaining clients and funds under advice.
“Dealer groups are not interested in how advice skills and businesses can be passed on to the next generation of advisers as they want to retain the clients and the fees within their own groups,” Tynan said.
“They have also helped to shape the biggest lie in financial services – that it is hard to own and run your own licence to stop advisers heading off with those clients and fees.”
Well said Paul. As one of those “60 +” advisors, whilst I still love the business, this ridiculous piece of proposed legislation would tip me over the edge and out the door. More than 30 years experience as an advisor during which I have had the privilege of speaking at AFA conferences, mentoring younger and less experienced advisors, but then as Paul has so aptly put it, “dealer groups are not interested in how advice skills and businesses can be passed on to the next generation…”!
Peter why should your clients be paying you to help me develop my skills so that I can help my clients? If you truly had skills worth my money (and I believe many older advisers do), I’m happy to pay you a consulting fee. But I think many of these “mentors” would just be going through the motions until retirement to ensure they can continue the status quo. Change is coming, there’s no doubt about that.
Good thinking and I hope it can work. With nearly forty years experience, I and I believe my clients are not ready for my retirement, a plan such as this would be to everyone’s benefit. That is the consumers, the industry, newer advisers and myself. We cannot afford to have thousands of years of experience and knowledge walk out the door all at the same time.
The industry, profession, call it what you like, continues to evolve. I for one over the years have pushed for this to happen, but I have no wish to be a casualty of over zealous legislation that will achieve nothing but fewer advised clients.
Like all of the legislation that will supposedly make the industry more accountable and that education makes people more honest it has been poorly thought through. If you could legislate for honesty there would be no politician, ethics are taught in the home as well as honesty, I have never in 30 years had anyone of my clients accuse me of not dealing with their best interest at the seat of the advice. Does not mean I have always got it right but I do not feel that if I have this magical new education standard piece of paper that my advice will suddenly be better. I have known many highly educated people in many industries that were both dishonest and lacked empathy, I think someone should get a grip, join the real world and let us get on with it. There will always be crooks and grifters trying to make a buck, deal with them with the full measure of the law, stop trying to tar us all with the same brush, I do think education is important but it is not the be all to end all.
This is a fantastic idea but, alas, it will probably present far too much common sense for our self interested legislators and squirming special interest groups to adopt or even give a 2nd glance to. Along with the provision to licence risk advisers separately, this flash of true brilliance will soon be forgotten, unfortunately, as it doesn’t help the aforementioned entities – or so they will shortsightedly perceive as usual. So sad to see what is becoming of our once great industry. The 60 year olds mentioned in the articles will sell their client bases and get out if they are blessed enough to be able to see where this whole industry is heading. Brilliant ideas like this from this clear thinking individual, Paul Tynan, deserve better than to be the responsibility of pollies and industry hangers-on to implement. Where’s the dealership and/or life company leadership on these things?
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