Latest analysis shows there are now nearly 3,500 ‘surplus’ advisers – those who are eligible to practice versus the number of current advisers on ASIC’s FAR.
In looking at the results of the latest financial adviser exam, Wealth Data’s Colin Williams highlights the gap between the number of candidates that have passed the exam versus the number of ‘current’ advisers at the time of the exam.
Williams notes that in August 2022, there was a ‘surplus’ of 2,229 of people / advisers eligible to practice versus current advisers.
“That surplus has now grown to 3,476 which is 22% of the current advisers for August 2023,” he states.
Williams adds Wealth Data is aware that many advisers passed the exam and still exited shortly afterwards.
“For example, this calendar year alone, 713 advisers have ceased on the ASIC FAR, all would have passed the exam. Many are being replaced by advisers coming back into advice.”
However that the firm can see “…there is a big opportunity to bring many more advisers back into advice.”
3,476 Advisers who could provide so much good for all Australians if they re-entered the Industry.
Specialist Wealth Protection / Risk Adviser numbers have plummeted and the Life Insurance Industry is crying out for Advisers to write Life and Disability Insurance so Australians can have sufficient cover.
We should allow these Advisers and any interested people, the opportunity to become specialist risk advisers and their Education requirements be specific to the work performed.
This would encourage people to come into the Industry and if those people wanted to further their education to become fully certified Financial Planners later on, then they could still earn money so they can pay their bills, while they continue with their studies.
The cold hard facts are that even though unadvised people can have access to limited Insurance cover, at claim time, the level and types of cover are insufficient for their needs, or for that matter to even pay off debt, let alone ongoing expenses.
On top of that, they could now be uninsurable.
The facts are clear. This is not theory. The current positioning is still too hard for people to be incentivized sufficiently to want to become a risk Adviser, as all they see are barriers and road blocks.
Take down the maze of complexity and make it feasible, then maybe we could have thousands, (The market needs a minimum 20,000 risk Advisers) not the current hundreds of Advisers who specialize and provide to all Australians great risk advice.
. . . aaaannnd Jeremy, let’s not forget the planet-size gorilla in the room . . . remuneration. Specifically ADEQUATE remuneration!
Yes, all spoken about before but deserves dredging up because there’s nothing less than the survival of our once-great industry (profession?!) relying upon it.
Consider time taken to provide advice, the commissions need to be at the level of 100% upfront. Anything less simply will not do and is doomed to fail. 60% upfront is an insult to professional advisers, 80% is just treading water/covering costs but 100% is where there is actually reward for effort. New advisers to the industry won’t make it on anything less AND the renewals still need to stay at 20%. Experienced advisers know in their hearts they are better off somewhere else at anything less than 100%.
Add the time taken to provide advice to the real compliance risk from the twisted system and sub-standard IP product offerings we have and any one can see 100% is the base from which remuneration must start. Then, of course, we have 2 year chargebacks, ever-changing laws along with sub-standard and inadequate contractual definitions in new policies that can land an adviser in hot water for replacing high-premium legacy policies. All valid reasons to closely look at what the pay for all this stress will be!
Seriously, look me in the eye and tell me why any self respecting experienced risk specialist would stay in this husk of an industry run by people who have demonstrated often that they don’t understand what advisers OR clients need. Those are the life company execs, politicians, industry so-called ‘councils’, bad jokes like ‘FARCE-IA’ and lawmakers all.
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