Financial advisers breathed a sigh of relief this morning when the bill containing the long-awaited extension to the deadline to pass the FASEA exam was passed by parliament. The deadline to pass the FASEA exam is now 1 January 2022, and advisers will also get an additional two years to meet FASEA's qualification requirements, which now have to be met by 1 January 2026. The extension will temporarily ease pressure and anxiety for advisers, but concern for the mental health and wellbeing of those in the industry remains. More than half of people from the financial and insurance services industries surveyed last year indicated they have experienced a mental health condition.
Without the extension, our research indicated that potentially thousands of financial advisers could have been forced to cease trading, leaving up to 1.5 million clients without access to advice and $900 billion in investor funds "in limbo".
Advisers Caught in Political Crossfire
While both sides of parliament wanted the extension legislation passed, it passage was held up because the bill was not just about the FASEA legislation, but rather a “bits and pieces” 'omnibus bill'. The issue came from the attempt by cross bench senator Rex Patrick to attach an amendment to the bill that the government rejected. The amendment dealt with a loophole that allows some large corporations on an 'exempted companies' list to not file financial records with ASIC. Last month ASIC released a list of 1119 companies still exempt from these reporting requirements. Many companies on the list are linked to some of Australia's most rich and powerful people and according to Tasmanian independent Jacqui Lambie, more than 1000 of the companies exempted since 1995 had donated a collective $20 million to the Liberal Party.
In response to the passage of the bill, Senator Jane Hume told the AFR "We're very happy we've been able to deliver on the promise," saying the bill had been held up by "game playing" by the Opposition and crossbenchers. For his part, Mr Patrick said he was withdrawing the amendment because there was "urgent need for financial advisers to be relieved in terms of their requirements for professional qualifications". In a letter to lobbyists representing financial advisers including the AIOFP executive chairman Peter Johnston, Patrick said "I am fully in support of your industry getting the time extensions that it needs" and added "I appreciate this politicking has caused some angst within your industry and I apologise for that angst".
Concerns For Mental Health Remain
While the legislative reprieve for the advice industry will offer temporary relief for many, there remains unacceptable levels of anxiety and stress that contribute to adverse mental health outcomes in the sector. Results from the most recent survey by a mental health organisation that partners with profit-to-member superannuation funds and insurers, Superfriend, indicated that 50.7% of all people working in the financial and insurance services industry have experienced a mental health condition.
The report noted that nearly half (47%) of those workers believe their current workplace caused their condition or made it worse. Of those, 50% said workloads and deadlines were the major causes of stress. The survey tracks the progress of workplace mental health and wellbeing across Australia against an ideal or desired state and is a representative sample of Australia's workforce. Last year’s survey reached more than 10,000 workers across a range of industries. It noted that “following a challenging few years with a Royal Commission and related media and public scrutiny, seemingly endless legislative changes, and senior leadership turnover, mental health and wellbeing in Financial and Insurance Services (was) finally moving in the right direction” compared the previous year, but said the financial and insurance services industry was still only two thirds of the way toward where it needed to be in order to be classed as “thriving”.
The report also noted the sectors contribution to mental health across Australia. After Government, the life insurance industry is the largest financial contributor for people with a mental illness, paying over $700 million in mental illness-related claims in the 2018 financial year. In comparison, $543 million was paid in workers’ compensation during that year.
It’s research, that many advisers would no doubt be able to relate to, said that more than a third (34.6%) of Finance and Insurance Services workers are highly stressed on a weekly basis. The major contributing factors were:
- a High degree of regulatory change,
- deadline pressure from quickly needed compliance,
- excessive workload and insufficient staff to meet deadlines and
- difficult customer interactions that were common because people have difficulty understanding the changes and the impact on their personal finances.
While anecdotally, many would agree with the findings of this report, it is vitally important that such studies continue, and attention is drawn to them. Doing so can both draw much needed attention to these often-neglected issues and help make them more accepted and mainstream, but also reinforce to anyone experiencing mental health issues that they are not alone.