The newly-launched FAAA’s submission to the Government on the Experienced Adviser Pathway supports the proposal, but suggests that this measure be better targeted.
CEO Sarah Abood says the FAAA, including its two predecessor bodies (AFA and FPA), “…has long argued for both high standards and better recognition for advisers’ prior learning and experience. We also acknowledge the challenges for older advisers, approaching their retirement, in undertaking an eight-subject graduate diploma.” (See: Experienced Adviser Pathway – Consultation Opens).
She says implementing an appropriately targeted experienced pathway could help to offset the substantial decline in adviser numbers over recent years (down 45% since 1 January 2019).
“A significant number of older advisers, who might have left the profession, could now stay for longer – which will be good for them and for their clients, who may have gone un-served in the absence of this measure.”
Abood says that consistent with its last submission, the association believes that this measure “…should be better targeted to older advisers, with the inclusion of a 10-year sunset clause.”
She sees this as representing an “…appropriate transition for established, experienced financial advisers and planners with a clean compliance record. Otherwise, we will be in a position whereby planners currently in their 30s could continue to practice indefinitely with no further qualifications required.”
In addition, a requirement to complete the Code of Ethics Graduate level subject would ensure that all practicing advisers have a shared understanding and body of knowledge of the legislated code.
…the experienced pathway proposal has divided the profession…
Abood says the experienced pathway proposal has divided the profession and the association’s membership, with its most recent survey showing that 50.9% of members are supportive of a pathway, and 49.1% are opposed.
“However the level of support would grow to 70% if both the sunset clause and ethics unit changes were incorporated.”
She says that much of the opposition to this proposal “…has been focused around the fear that this change will undermine the perception of financial advice as a profession. Substantial changes have been made in recent years to professionalise financial advice, with a big impact on the many who have invested time and money in completing the additional qualifications required under FASEA.”
… It does us no service with consumers to create a two-tier system…
The FAAA’s message to members is that “…we are a profession, and your clients acknowledge this. It does us no service with consumers to create a two-tier system, using terminology that makes no sense to them.”
“Many ‘relevant’ providers are also experienced. Many ‘experienced’ providers will also have qualifications. These points were very strongly made to us by members during this consultation.”
Abood says this is why the association has also recommended that a distinction between ‘experienced’ and ‘relevant’ providers not be made on the FAR.
“It is time for us to come together as a profession and ensure consumers can have full confidence in their financial adviser who is registered and licensed to practice.”
Abood says the FAAA is keen to see the Government finalise this proposal soon, “…to enable financial advisers to make decisions about which pathway they will pursue. We trust that this certainty will help many to make the decision to stay within this important profession.”
She notes too that the association strongly supports the technical fixes to address issues with new entrants and the tax qualification for tax agents.
Good old FAAA, or whatever its called this week
I have 35 years experience and never had a complaint. I passed the FASEA exam. To do so I undertook an intensive 6 week course with Knowlegdge Shop, plus study. I will have to depart the industry in just 19 months unless the Pathway comes in, continuing the rapid decline of risk specialist numbers below 500. That Ethics course will add nothing to my ethical judgment or benefit my clients. Just another FPA pipe dream – fiddling while Rome burns. Will they be selling the course?
I keep wondering-when will the insurers who prop up the FAAA will come to their senses and start saying publicly that a ridiculously low number of risk specialists has clear implications of reducing RISK new lives. The other elephant in the room is that no one but risk advisers apparently understands that when an adviser leaves , the client-adviser relationship planks, and 25% of policies will lapse. The “rivers of gold” will be no more!
Those insurers who dabble in group cover with ISN funds on 3 year contracts will have to exit.
The FAAA have a lot in common with the Greens. They would rather have THE PERFECT, and forego the chance of THE GOOD. And they still seem to think they represent Consumers first, advisers second, or is that Third, after their Partners
Holistic Financial Planning, where we look at every possible scenario of a clients past, present and future position and direction, that maps out all of life’s up’s and downs around their financial, professional, health and wellbeing that is all linked when building a framework and plan for a clients wealth protection, wealth accumulation, Investment and retirement strategies.
Sounds wonderful in theory, though in the real world, is not possible for the vast majority of Australians, based on two criteria.
1) Money the client would have to pay for this is more than they can afford or are willing to pay.
2) The time and expertise required to be able to provide expert advice in every field, cannot be done expertly by one Adviser.
It is akin to saying every new doctor must now study for every specialist qualification before they can see patients and existing GP’s must take on additional studies to take into account all medical specialties in order to continue seeing patients.
Or in the building Industry, all trades people will now need to become experts in every other trade that works on a building site and apprentices will need to do the same via a University pathway.
In theory and ignoring the practicalities of this Utopian vision, the world will become a much better educated place.
Now, back to reality.
This bold plan has been tried on our Industry and look what happened.
It was and still is a disaster that has caused mayhem.
It takes NIL imagination or foresight to see what would happen to the Building Industry, or Medical profession and the impact on ALL Australians if the same grand plan was put into action for them, that was forced upon us.
Now, once again, in order for something to work, it must first pass the reality check.
That and the risk and reward check.
For years many of us warned what would happen and we were ignored.
The FAAA need to take heed that the University pathway for new entrants is not the Saviour for our Industry as a standalone strategy,.
Without other ways to join the Industry at an entry level, such as wealth protection advice, that needs 20,000 Advisers and is now down to less than 1200, the current pathway is a blocker and the evidence is in plain sight when you count how many NEW risk specialists have come through the University pipeline and count those who have left due to the utopian visionaries blinkered approach to education.
It is human nature to say that if I had to go through an education refresher hell, to keep my license, then so should everyone.
However, if and as has been the case where we warned what would happen to Life Insurance New Business if to be a Life Insurance specialist, we were forced to take on additional studies where 90% was a total waste of time and money spent, due to it having NIL bearing on the work performed, then the impact will be massive adviser exoduses and a collapse of sales which WOULD and DID cause premiums to rise dramatically, for ZERO benefit to all Australians, except the Education lobbyists who were paid millions to push their own agendas.
So, I put it to the FAAA, if you want to see positive growth in Adviser numbers, more Australians being able to access quality affordable advice and premiums in their wealth protection coverage, then you take very seriously what I and many experienced specialists and practice owners who are at the coal face are saying and look at making it an attractive option to join our Industry, as today it is the opposite.
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