No matter what clients think, 500 advisers forced out

Mike Taylor

Managing Editor/Publisher, Financial Newswire

2 September 2022

Financial adviser numbers will have officially dropped to around just 15,800 with 500 advisers either ending their careers or opting to re-enter the sector the long way around, following their failure of the latest financial adviser exam.

The importance of the July/August financial adviser exam sittings was lost on no one, with it representing the last exam before the 30 September extension deadline granted by the Federal Government.

What is more, while the Treasury has yet to fully flesh out the so-called “experience pathway” it is already known that it is not going to be accessible by advisers who have not passed the exam.

ASIC has highlighted that 15,800 advisers currently registered on the Australian Securities and Investments Commission’s Financial Adviser Register (FAR) have now passed the exam but according to WealthData principal, Colin Williams, numbers may very likely drop below this number.

He has pointed out that ASIC has reminded financial planning licensees of the need to promptly remove advisers who have failed the exam from the FAR on the basis that there are no further exam sittings available.

The impact on the advisers who have failed the final sitting of the exam was laid bare in comments on the Financial Newswire web site, particularly that of the wife of an adviser who lamented that someone who was patently good at his job was being forced for the industry on the basis of an exam.

“My husband is an older Planner (60) working for a large Superannuation firm. He loves his job, is respected by staff and Clients and has always passed his audits and kept up with compliance. His Company have an option for Clients to leave reviews and my husband has received the most 5 star reviews with comments stating that he explained and assisted them better than any Planner they’d ever spoken to. Naturally I’m biased and I’m not a Financial Planner but I simply cannot understand how this exam can decide that my husband is not good enough to do his job when clearly he’s doing a great job. Furthermore, it seems unfair that he has never been given the opportunity to see his marked exam and learn from his failed attempts. I hear the posts from the accusers saying if he can’t pass the FASEA he doesn’t deserve to be in the Industry – from your perspective I’m sure you are right. My perspective is one of bewilderment and sadness for an honest, hard working man who simply wasn’t academic enough to pass this very difficult and challenging exam. He will be missed by Clients and all the staff (especially the young ones) who constantly go to him for advice (I was told this by one of the staff).”

The need for the 500 advisers who have failed the exam to stop practicing comes against the background of advisers generally continuing to exit the profession with 825 having been removed from the FAR since the beginning of the calendar year, 114 of which have departed since the beginning of the financial year.

According to WealthData, the profession has shrunk by 41.52% or 11,627 advisers since 1 January, 2019.

According to Williams it is to be hoped with the steep drop off in adviser numbers which will be generated by the latest adviser exams, numbers might finally begin to stabilise.

Key Adviser Movements This Week:

• Net Change of advisers (-12)
• 26 Licensee Owners had net gains for 38 advisers
• 31 Licensee Owners had net losses for (-46) advisers
• 3 new licensees commenced and (-9) ceased
• 4 Provisional Advisers (PA) commenced and zero ceased.

Summary
A decline of (-12) advisers for the week, this was despite a small bounce of advisers reappearing on the FAR after ceasing in last week’s reporting.

Growth This Week
MBS Advice who commenced last week with 7, added another 7 this week to take them up to 14. This licensee are all advisers who were attached to Bombora (showed as losses last week). A new licensee commenced with 3 advisers, this was a former practice attached to Affinia.

A licensee that commenced last week gained 3 (as signalled to our members) with advisers moving across from WT Financial Group (Synchron). A licensee reappeared with two new advisers and Lee Clarke and Co jumped by 2, with both advisers yet to cease with their current licensees, Hillross and Novatax.

A tail of 21 licensee owners gained 1 adviser each including Wilsons, Politis, Morgans, Fortnum and AMP Group.

Losses This Week
Insignia and WT Financial Group both down (-5). Insignia hired 3 and lost 8, none of the 8 have appeared elsewhere. WT Financial down 5 with 4 appointed elsewhere. Tal Dai-Ichi Life (Affinia) down (-4) and 3 reappointed as noted above.

4 licensee owners down by (-2) including Bluewater and Centrepoint, and a tail of 21 licensee owners down (-1) including Unisuper, Australian Unity and Marsh Mercer.

This week, 9 licensees effectively closed. 8 of the licensees belonged to our Accounting – Limited Advice model (SMSF Advice) and the other was Financial Planning. Total loss was (-9) advisers, all licensees being single adviser practices. Some losses back dated to last year and one all the way back to 2017.