Synchron Call to Carve Out Risk Advice From Financial Planning

Outspoken Synchron Director, Don Trapnell, is urging life companies to back his call for the industry to draw a line in the sand and separate risk advice from financial planning advice.

Synchron Director, Don Trapnell – continues to push for the separation of risk advice from financial planning advice…

Trapnell’s call comes in the wake of the finalisation of the FASEA adviser examination and minimum education requirements that will be imposed on all advisers from 2021 and 2024 respectively (see: FASEA Finalises Education Pathway Requirements).

…if there is no separation of risk advice and financial planning advice, there is likely to be a mass exodus of risk advisers

He warns that if there is no separation of risk advice and financial planning advice, there is likely to be a mass exodus of risk advisers from the industry. In a reference to the FASEA education requirements, Trapnell said,  “Specialist risk advisers have a different skill set and provide different services to financial planners and always have. It is therefore difficult to see why there is such a push for them to hold the same qualifications and commit to the same educational program as financial planners. It doesn’t really make sense,” he said.

Trapnell is seeking support from life insurers to join Synchron in its call for the separation of risk advice from financial planning advice, with a possible glimmer of hope resting in some observations made by the AFA in its own response to the final FASEA education requirements, in which it indicated that it would be possible to modify FASEA’s legislative instruments.

The consistent argument put by Synchron has been that licensees should be able to hold a specialist AFSL to deal in financial planning advice and/or a life insurance broker licence. It argues a licensee could then choose to hold one or, as Synchron says it would, both licenses and their authorised representatives could be authorised in either or both.

  • Concerned

    Well said Don. My concern is how you would convince the government and ASIC. My belief is that a collective representation is the only way. That is, the head of the AFA, the UFAA and maybe yourself, go to the government collectively and help them understand what is happening and what will happen if we continue down this path.

  • Jeremy Wright

    Don, you have been the voice of reason for many years and it is a clear example of how indifferent the Regulators, Associations and the Government are to listening to great advice, backed by years of experience.

    Instead, the Government acts like a Blind man caught in a storm and will take advice from all and sundry, resulting in a lot of conflicting information.

    This request is not new. You and many others, have asked for a separation for years and this has fallen on deaf ears.

    What is it about Government policy, that NIL common sense and massive down side is the standard policy theme and it is only when there is an uprising after years of fruitless negotiation, that anything is done.

    It gets back to what I have been saying for years. There must be a demand that ALL public servants and everyone who is involved or wishes to make comments or submissions, be held accountable for what they say or do, just like we are.

    This would remove 90 percent of the clutter and noise, which will then give the likes of Don, the opportunity to be heard.

  • Just About Done Now

    As a Risk Only Adviser, that also spent the wee hours of this morning pacing the corridors of my home for several hours worrying about my future in this industry, this IS THE SOLUTION the industry needs!

    As long as the ‘advice boundaries’ are clearly defined, then a much more suitable and RELEVANT education pathway can be set subsequently enabling Risk Advisers to remain in the industry. This IS the common sense approach.

    If you’re a full financial planner, good luck to you – but you need to do all the education. But riskies don’t want to advise on Managed Funds, Estate Planning and SMSF’s so why should we do the education for it?

    Plumbers belong to the construction industry but they do not have to get a trade in concreting, roof tiling, plastering, carpentry or painting. The same principal should absolutely apply to this industry.

    How about some common sense be adopted by all parties concerned – including both sides of politics and regulators, as a refreshing change?

  • GT

    I respect Don Trapnell but I don’t support his view on this. I don’t believe this fight can be won. You can’t possibly advise a client on their need for insurance without taking into consideration the implications this has on their other financial goals. There is a trade-off in any decision to take on insurance. I previously worked for an advice business where there was a risk only adviser and by the time they finished with the clients insurance advice there was no money left over to fund other goals they specified as being important to them. Not all advisers operate this way but unfortunately, whether it be risk or wealth, it’s those bad operators that they are legislating against and who have led us to this point.

    Despite my view above, I would strongly advocate for a ‘risk product specialist’ whereby a financial planner who has determined the level of cover required and met all the regulatory requirements associated with the provision of this advice (agree with them or not), liaises with and then refers the client over to be advised on the appropriate product for them. Under these circumstances, I don’t see a need for such a specialist to adhere to all the educational requirements that are being tabled now. It may be that advice businesses employ someone into this specialist role who does not need to be authorized and the financial planner then takes responsibility for the product advice.

  • lester beling

    I said this 25 years ago, but since the pudding is in the APL etc. This never went any place. Yes it was sexy to be called a Financial Planner so they all became financial planners, and RISK Insurance also became sexy – what is RISK Insurance??