How much experience has been lost through adviser exits?
3,322 financial advisers who exited the Financial Adviser Register between 1 December, 2021 and today could be counted as experienced advisers, with at least five years’ experience.
What is more, close to half of those advisers did not fit the stereotype of being older and struggling to pass the Financial Adviser Standards and Ethics Authority (FASEA) exam.
However, notwithstanding the stereotype, around a third of the advisers to head for the exit had more than 20 years’ experience.
What is clear from the analysis, is that the regulatory attempts to replace the so-called ‘accountants’ exemption’ with limited licensing ran into a brick wall when those people needed to pass the adviser exam.
According to WealthData principal, Colin Williams it has been people with an accounting background working under the limited licensing regime which have made up the greatest proportion of exits from the Financial Adviser Register and who, by and large, had the least experience in the financial adviser space.
Williams said that on the available evidence, it was not just a case of these limited licensing people failing the adviser exam, many simply chose not to sit it.
Of significance is the fact that when the limited advice advisers are discounted from the total number of exits, it reduces to 2,480
Importantly, the WealthData analysis also shows that of the 3,322 people to exit the Financial Adviser Register between December, last year, and today, as many as 781 had actually passed the adviser exam but chose to leave anyway.
“We know that proportionally, the advisers belonging to the Accounting – Limited Advice business model (peer group) suffered the greatest losses. They also had a less experience as most joined post 2016 when advisers were allowed to join the FAR and offer restricted advice to SMSFs,” he said.
“After removing the advisers who belonged to the licensees we recognise as providing mostly restricted advice, the proportion of advisers with experience changes considerably,” Williams said.
This is all good data, but what will it resolve? is anyone going to allow Finacial Planners holding greater than 20 years’ experience back into the industry? move on let it go we were screwed.
The exam is only a small part of why people are leaving, it’s a terrible occupation at present.
Spot on. It’s like a paperwork nightmare. Human beings are not supposed to live like this. It’s akin to asking someone to run around in circles 50 times each time they need to open a door. Just let us do our job you useless bureaucrats.
I always use the example of what would happen to the medical profession if they had to write a Statement of Advice type report everytime a patient showed up with a sore throat. Or are health matters not taken as seriously as financial matters?…..
A great occupation with terrible oversight and persecution by regulatory bodies !