The exam cliff: 450 experienced advisers gone in 2 weeks
The long-predicted financial adviser exam ‘cliff’ has been reached with 450 experienced financial advisers exiting the Financial Adviser Register (FAR) over the past two weeks with more significant departures expected in the week ahead.
The latest analysis of the FAR reveals a net loss of 444 over the two-week period, with 149 departing last week and 295 falling off the register this week.
And while many of the adviser exits are attributable to the 48% pass rate registered from the last adviser exam, WealthData principal, Colin Williams said he believed the numbers also reflected the reality that a number of advisers had simply never sat the exam and had ‘gamed’ the exam time-line extension to remain in the profession.
Williams said it was likely a significant number of exits from the FAR would be recorded next week as smaller licensees brought their records up to date.
While 28 advisers working under the AMP umbrella exited the FAR, the data revealed that a further 22 advisers were lost to the National Tax Accountants Association, bringing to 393 the number of advisers lost to the license over the past 12 months.
Key Adviser Movements This Week:
Net Change of advisers (-295)
24 Licensee Owners had net gains for 31 advisers
114 Licensee Owners had net losses for (-326) advisers
6 new licensees commenced and (-8) ceased
8 Provisional Advisers (PA) commenced and (-1) ceased.
Summary
This week’s loss of (-295) was large and when combined with last week’s loss of (-149), the net loss over two weeks is now at (-444). The losses have been driven by the need to pass the Financial Adviser (FASEA) Exam for those advisers who were given an extension to Sep 30 this year.
We believe there are some more losses, but not as heavy to come over the next couple of weeks before flattening out. As a reminder, licensees have up to 30 days to report losses and with the current run of public and school holidays, reporting may be lagging a little.
Growth This Week
A very low number of licensee owners with net growth this week at only 24 and 6 of them are new licensees. PSK grew by net 6 with all advisers moving across from Charter (AMP Group) to the PSK AFSL. Note: PSK purchased the Ipac business from AMP and have renamed the AFSL to PSK. PSK also have a large team of advisers operating under the Charter AFSL.
Two new licensees commenced with 2 advisers each. One commenced with advisers from PIS (Centrepoint Group) and the other with advisers from Synchron (WT Financial). A tail of 21 licensee owners up by a net 1 adviser including the remaining 4 new licensees.
Losses This Week
Significant losses this week with AMP Group suffering the heaviest net loss of (-28). Lost (-30) advisers and gained 2. AMP Financial Planning lost (-17) and gained 2 for a net (-15) and Charter lost (-13). Other than the 6 advisers that went to PSK, none of the remaining advisers have been appointed elsewhere to date.
NTAA (SMSF Advisers Network) down (-22). This licensee offers limited / restricted advice for SMSF clients and were hardest hit at the end of last year, when many advisers ceased on the FAR in December. To put that into perspective, NTAA is down (-393) over 12 months.
Bell Financial (Bell Potter) down (-20) and Morgans down (-16). Both firms are in our Investment Advice business model (peer group). Over 12 months, Bell Financial are down (-48) and Morgans down (-39).
WT Financial Group down (-14) with their licensees Synchron down (-8), Sentry (-2) and Wealth Today (-4). Financial Link down by (-12) and suffered more than most on a proportional level over the last 12 months, down (-38) or (-44%). Sequoia down (-10) and Insignia down (-8).
The 8 licensees that effectively closed had net combined loss of (-11) advisers.
WealthData and Financial Newswire form the Wealth Division of FST Media.
And yet despite all of the planners exiting I got a 2.5% pay rise after lifting my revenue by 25% and was told to be grateful that I have a job.
I suspect my boss is firmly of the view that the end result of this is planners go to zero!
Change your job then. Or complain anonymously, whichever suits.
The sad issue is that in a time of Scams and complex financial services most of these advisers would be highly experienced and with a unblemished record of service. Probably older ones who have helped many on the path to financial security.
How do we know they were experienced?
I have been following this issue very closely and from my feedback and discussions this is the case however it would be useful for the Financial advisers register and ASIC to do a full report on the loss.
So irrespective of whether they were experienced or not, they still failed an exam that up until the end of December 2021 close to 9/10 planners had passed.
That is on top of there being over two years to study and complete it.
Sounds like you were short changed in the country. In the big smoke we had over 3 years!
Dare we open the “pandora’s” box on the FASEA exam yet again. ? I think many just did not want to do it and were planning on leaving { what age bracket was the last 400 in ?} Secondly never being advised of where they went wrong was infuriating to many as they had no idea what to “brush” up on. Some people just simply struggle with an exam but are very adapt at their job. This can be not understanding the written word. And dare i say it. How do they know they failed we only have FASEA ‘s word on it. I hear plenty say they were 99% confident they had passed { particuarly after two failed attempts} only to be told “sorry” with no report or return of the exam paper showing why.
maybe i am just being sinical but ?? The exam was a fiasco in the first plave. And before you start yes i passed at 1st Go. A bit of empathy needed here i think
Good words ‘Worn Out’. All sadly true too. I think one particular part of your comment should be emphasized to those who would dismiss older advisers or other who failed as bad advisers: “Some people just simply struggle with an exam but are very adapt at their job”. Unfortunately a lot of advisers who left WERE exceptionally good at their jobs but were in the age category that didn’t align with the ridiculous AQF high level qualifications that are mandatory by 2026. Age PLUS the tens of thousands of dollars in costs (including study time away from income producing client facing) was untenable and they retired early.
I know exceptional advisers in this category who left when they still had MUCH to offer their loyal clients. Two were risk advisers – to whom the AQF uni qualifications were totally irrelevant – the other was a top well known (but older) investment planner. None of them could justify the costs and inconvenience just for another (up to) 5 years or so. Certainly not after a blemish-free 40 PLUS years protecting and guiding clients. Just abjectly abhorrent the dismissive treatment of older advisers who gave much, were knowledgeable and intrinsically capable. Exams for them were fully unnecessary AND a death knell to their careers and their life’s love.
Oh bravo genius…you passed an exam!
I had 15 years experience as a Risk Only Adviser. I never had a complaint in that time and had every claim paid (including one on my very last day for $200,000 to a 42 y/o lady wioth Stage 2 Breast Cancer). I rated nothing more a ‘Low RIsk’ with every annual audit my Licensee conducted.
From meeting with my FORMER Licensee’s Legal Head last week, I was told my reputation as an adviser was exceptional and that my book of 200 clients was very much hot topic now because it was known it would be ‘clean book’ without issue – yet here I am now on the street because I couldn’t pass an exam that was mostly not related to what I do.
Like many, I attempted this extremely flawed exam numerous times LAST year without success. Both times, I got no feedback on where I went right or wrong. What education body does that??!!
When it was passed over to ASIC this year and they bumped the fee up from $600 to $1,000 and 96% of adviser FAILED the first sitting, it was bloody obvious this thing was never designed for advisers to pass – even though that 4% pass rate was fudged up to 32%. I knew there and then I would not sit this again because ASIC are as corrupted and unethical as it gets. I have zero faith or trust in them as a regulator so I made the decision I would not bow to their behaviour. I now live with the result of that decision.
Other advisers resat and tried to pass this flawed exam 5-6 times without success. Are they poor advisers – I strongly doubt it. Can they pass an exam when they probably haven’t sat one for 20+ years? Clearly they struggled, as did I but I bet their clients are all shattered now knowing their TRUSTED adviser can’t talk to them.
Am I better adviser than you – despite not passing the exam. I’d put my life on it! But you keep on bragging ‘big guy’…you are such a genius.
Well with close to 50% of advisers now removed I hope that might mean I am going to get half the amount of “noise and focus” from various associated and often self interested non financial adviser participants in the industry, usually with perfect 20/20 hindsight in such matters as to how to provide advice, when to provide advice, what I should be charging, how I should be running my business, continual questioning of my ethics, unfair justice processes, continued complex and conflicting compliance requirements, further attempts to reduce client access to financial advice the list goes on and on. However I fear that the opposite will apply and will receive twice as much!
Yet I think you may be correct