Thousands of advisers still lacking approved degrees
There are still over 3,000 financial advisers on the Financial Advisers Register (FAR) who are without a degree and expect to rely on the experience pathway to continue their careers.
To benefit from the experience pathway, first proposed by Labor in early 2022, advisers must have commenced before 1 January 2009, have a clean record, have completed an approved ethics subject and have passed the financial adviser exam.
This exempted them from having to complete an approved bachelor’s degree or graduate diploma.
However, time was running out for these advisers to get the required qualification if the experience pathway was not implemented, as starting a bachelor’s degree would take three years to complete and the exam deadline was 1 January 2026.
Research by Wealth Data found there were 8,239 advisers on the FAR who had commenced before 1 January 2009, and 3,166 of these advisers, representing over a third, currently lacked any type of degree.
This meant they had neither an approved degree nor a general degree, which would likely require advisers to complete a shorter bridging course to meet the requirements.
When data went further back to advisers who had commenced pre-1999, the number of advisers who lacked a degree rose from 38 per cent to 48.5 per cent.
This compared to only 23 per cent of those advisers who commenced post-2009 who were yet to complete a degree.
Colin Williams, founder of Wealth Data, said: “Many of the 3,166 may well be progressing towards a degree; we just don’t know. But for those who have not commenced, time is running out.
“An approved degree generally requires three years of study, so it would be very difficult to complete a degree by the end of 2025 and work at the same time.”
AUTHOR
Laura Dew
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Absolutely correct, I’m on of the pre-1999 group, with a GradCertComm (FP). Now mid 50’s. Passing FASEA was bad enough, but juggling work and family life with teenage kids is harder. I’m contemplating retiring end 2025 and having a tree change in the run up to retirement
There should be no exemptions. This makes a mockery of the efforts of advisers to satisfy the qualifying requirements before the cut off date.
This proposed change rewards the lazy and the types who should go.
How dare you, to say we are lazy is absurd. I have already done years of study, continuing education every year, additional study to be an SMSF, Aged Care, Centrelink, Direct Equities expert, done the FASEA exam, competed the Ethics module. 23 years of experience is far more valuable than you clearly understand.
Times are about to get interesting with a further impending exodus of advisers seemingly evident, which will likely see adviser numbers level out at roughly 12,000 nationwide. This means simple economics 101 will kick in with high demand and low supply meaning the cost of advisers will increase further. The government, politicians and their appointed lawyers pushed hard to restructure financial advice into a "profession" and so that is exactly what they will have. Qualified Financial Advisers who will charge fees like lawyers, accountants, doctors, engineers, etc do. There is nothing wrong with that. What is wrong is the expectation that "qualified professionals" work for peanuts. You've gotta be careful what you wish for.
There should be no exemptions to having a degree by 2026.
And there should be no more delays to the 2026 timeframe - it has already been delayed once.
The entire profession will look like clowns if this goes on much longer.
What about former folk on the FAR who are now only providing General Advice and servicing 708's ... like me
been in industry for >35 years, have degree from o/seas Uni, p/grad dip of the SIA, but declined to do a ethics exam.
In my view, after 36 years in this once-great profession, I can confidently attest that there will be less than 10,000 investment advisers (AKA financial planners) by 2026 and so close to zero specialist risk advisers it won't matter. You don't often see the risk advisers mentioned and that is a major oversight by many publications and entities.
You'll then find the only distribution outlets for specialist risk advice will be life companies, direct OR the aforementioned investment advisers who, in the main, do not have a passion or in-depth understanding of complex risk advice. These types of advisers only usually do risk advice when asked or as an add-on/afterthought. God help the clients AND the life companies whose income will dry to a drizzle very quickly. I hope those statutory funds are in good shape as they'll definitely need them for a while until they snap themselves out of their quagmire and really start to rattle the pollies for change. Sad thing is it will simply be far, far too late to do anything as all the good advisers will be gone (most are already) and life companies will fold, merge, withdraw from the market or be taken over by banks and investment groups - just to obtain the poor hapless clients. So much for 'client best interest' - the pollies and special interest groups never believed in that fantasy anyway sadly.
I have all the necessary degrees, plus ethics bridging plus passed the FASEA exam and I am going. Had enough of the BS in the profession. I am selling my business and taking that risk off the table and will work for the colleague who buys for a couple of years but that is it. Im not hanging around to see my business value destroyed by the socialists in government or the idiots before them, so deserving of being in opposition.
@ Squeaky 21,
You are probably not old enough to know, but back in the late 1990's there used to be 57 life offices, 329 products and 13 different product categories.
Comparing that with today's current insurance market, is all under the banner of progress
The LIF legislation in 2013 promoted by the Financial Services Council (FSC) in concert with the government saw the demise of the life insurance industry as we once knew it.
Does anyone think that the Hayne Royal Commission and its subsequent recommendations did anyone any favours ?
And yet the FSC and many of the life companies were happy to endorse it and to see adviser initial remuneration reduced over time by 50.0% and discontinuance responsibility for advisers increase from 1 year to 2 years.
Consider the current landscape.
There are about 8 real life companies left and 3 of those own one of the eight.
There is no product differentiation, premiums are no longer guaranteed, clients see no benefit unless they plan to die too soon or get too sick or hurt to work beyond 2 years.
Today the current Income Protection products are not worth the paper they are written on compared to what was once available.
If profitability is the problem, perhaps the life companies should have been more discerning about who they wanted to take on as a client. Their pricing model and the terms offered, commensurate with the level of risk associated with potential claims.
No one in their right minds thinks that writing risk insurance is anything other than someone jumping out of a plane without a parachute.
@Aleycat
"You are probably not old enough to know . . ."
Hahaha! Thanks Aleycat, that may just be the nicest thing anyone has said to me in 55+ years! ;-) Cheers!