‘Plan B’ Offer for Risk Specialists

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Risk specialist advisers contemplating their future in the industry are being offered an alternative pathway by a Queensland-based financial services firm.

The offer, being made by Australian Financial Advisory Network (AFAN), has been designed for risk specialist advisers across Australia who are either unable to, or elect not to, successfully complete the FASEA adviser exam by the end of 2021.

The basis of the proposition, positioned as a ‘Plan B’ alternative, involves the risk specialist adviser continuing to serve their current client base in a consulting capacity, in return for sharing trailing income with AFAN.

Under this model, AFAN says the consultant – formerly the adviser – will be able to:

  • Sit in on client reviews with one of AFAN’s authorised representatives
  • Make factual statements about the client’s insurance contracts
  • Assist with claims and administrative inquiries

The firm says the only thing the consultant cannot do is say “I recommend…”

Remuneration

AFAN says it remunerates its consultants by passing on 70% of the ongoing trailing income, and that each consultant who joins the AFAN team is guaranteed to receive this trailing income for a minimum of five years.

A statement from the firm notes “Ideally we want our Consultants to stay for a longer period of time, but even when they do decide to retire they then become members of our AFAN Community. The AFAN Community allows our retired advisers to continue to pass on their knowledge & expertise to young planners coming through the ranks.”

Driving this initiative are established industry practitioners Ian Macpherson, Craig Ball and Paul Geisel, who jointly founded AFAN in 2019. A summary of their proposition says AFAN allows risk advisers to:

  • Remain in the industry
  • Continue earning an income
  • Add value to their clients by introducing them to all of AFAN’s services
  • Earn additional income when their clients utilise other AFAN services such as:
    • estate planning
    • retirement and financial planning
    • commercial and private lending
    • general insurance
  • Substantially reduce their costs as expenses are shared within the co-op group
  • Continue to have a purpose
  • Pass on their knowledge and experience to younger advisers/planners
  • Pass on all of the compliance and administration responsibilities to the team at AFAN

The firm notes that, other than recommending the ‘education pathway’, it does not appear that other licensees or industry bodies are doing much at all to provide a ‘Plan B’ for advisers and that hopefully some will see AFAN as their Plan B.

Click here for further details of AFAN’s Plan B proposition for risk advisers.



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6 COMMENTS

  1. That is asking for trouble, acting against the intention of the government and legislation. If it doesn’t work, where does it leave the riskies? Whom do they sell to then? AFAN will own the clients.

    • Even though the intention of the Government is to lift the education standards, the consequences (intended or unintended) are that many terrific Risk Professionals will find themselves at the end of this year with no authority to give advice & no purchaser for their business. A percentage of Risk Advisers will be fortunate enough to secure a buyer for their businesses &, I expect, will be very relieved to leave all of this turmoil. Current statistics however suggest that upwards of 2,500 Advisers will be left with a business that has zero value because of their failure to sell and/or successfully complete the FASEA exam. Do we as an industry simply turn a blind eye to our colleagues who find themselves in this predicament or do we put our heads together & try & find a solution? Given that our current industry suicide rate is 3 per month, & the expectation that this will increase as reality hits home for many who are now backed into a corner, we at AFAN have chosen to try & find a solution. AFAN’s current consultants are very happy with 5 x 70% as opposed to a possible $0.

      • Current statistics however suggest that upwards of 2,500 Advisers will be left with a business that has zero value because of their failure to sell and/or successfully complete the FASEA exam. Do we as an industry simply turn a blind eye to our colleagues who find themselves in this predicament or do we put our heads together & try & find a solution?

        Won’t consumers be mortified to discover that their adviser of so many years failed to meet education standards? Or do only adviser interests matter?

        • Stockbroking firms are experiencing 70% – 100% failure rates. The FASEA exam does not take into consideration the fact that many in our industry specialise. I successfully completed my FASEA exam in November 2019 however the vast majority of questions asked in that exam were about areas where I never have & never will give advice. I am now ploughing my way through the Graduate Diploma &, once again, am being tested in areas where I will never give advice. Most clients of Risk Advisers would not expect their adviser to give them advice on transition to retirement strategies for example.

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