More than three-quarters of advisers say changing the federal government would not improve Australia’s financial advice landscape, Adviser Ratings research shows.
As Prime Minister Scott Morrison set a date for the 2022 election, Adviser Ratings asked advisers whether they thought a new leadership team would have a positive effect on the advice profession. Seventy-six per cent said they were ‘not in favour’ of the change, while 24 per cent supported it.
Figure 1 – Adviser poll, federal election 2022
Source: Adviser Ratings
The Labor Party: then and now
It may seem like decades ago that the Future of Financial Advice (FOFA) reforms were introduced under the Labor Government, but it was actually just shy of 10 years. Shortly afterwards, the party lost power to the incumbent Coalition.
In the lead-up to the 2022 election, Labor has promised to tweak education standards in the hope of bringing more advisers back into the fold. Late last year, Labor’s Stephen Jones, shadow minister for financial services, told voters it would abandon the degree-equivalent requirement for advisers with more than 10 years’ experience.
Jones has also been vocal about making advice more accessible to consumers and reviewing the industry funding model, but has stopped short of specific promises on these matters (the former could be partly addressed by increasing the adviser workforce).
The Coalition: then and now
As the incumbent of nine years, the Coalition held the reins at the time of the introduction of professional standards, the Hayne Royal Commission and its aftermath.
More recently, Financial Services Minister Jane Hume has also been looking at scrapping degree-equivalent requirements for existing advisers with 10 or more years’ recent experience, provided they pass an ethics subject.
The Coalition government is also kicking off the Quality of Advice Review, which will look at whether current regulation is fit for purpose and can be simplified.
Advisers divided on education changes
While recognition of experience could increase the adviser workforce, it would not be popular with all advisers. In fact, a poll Adviser Ratings ran with hundreds of responses showed just under half of our survey respondents (44 per cent) were not in favour of further recognition of on-the-job experience, while 56 per cent supported it.
Some advisers told us it was too unfair to shift the goalposts when thousands had undertaken completing additional education requirements in the past five years; others supported the move and said experience was under-recognised in the current standards.
Our recent analysis suggests that if having more than 10 years’ experience but no degree hits the benchmark to practise, a further 10,000 advisers would be deemed qualified, including 2717 who are no longer registered on the Australian Securities and Investments Commission’s Financial Advisers Register.
Adviser Ratings forecasts adviser numbers will plateau at 12,000 in 2026.
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Comments8
"I think I will have to stop reading these comments. It's no good for my blood pressure. I respect the opinions of people who have something to offer, whether I agree or disagree. I am sick and tired of reading comments from the likes of "Qualified Adviser", who's comments are just an "uneducated " slur on thousands of professional, well respected, compliant advisers. It's just an unwarranted insult. Sure there were, and still are dodgy ones. They are perceivably just more clever and better educated now. Leopards don't change their spots. I'm pretty sure that most advisers who have done their education will probably use about 5% of it. I get that advisers who have completed their education requirements think it is unfair to give more recognition to experience. I also believe that reaction is selfish. I don't believe that party politics on either side has been the biggest problem. It seems to me that our professional associations, such as the AFA are toothless when it comes to bringing a reasonable, commonsense argument to the politicians who make the decisions on regulation of our industry. "
Deputy 13:06 on 18 Apr 22
"Nothing either party is spruiking is going to drive significant enough change to stop the shedding of advisers. For most clients, I know pretty quickly, thanks to my experience, where I can make recommendations to improve their financial situation. I am just demotivated to have to jump through all the compliance hoops we need to jump through to provide this advice. The outcome is rarely different to what it would have been without these hoops in the way but no-one is willing to back our experience and knowledge and reduce the number of hoops. Ultimately consumers suffer through higher costs and less of them being able to be serviced. BTW - there are still your Melissa Caddick's operating out there despite all these regulations, as the name and shame reports attest to. They will always be crooks there so don't strangle the whole industry trying to achieve their eradication when it can't be achieved. "
GT 18:36 on 13 Apr 22
"Clearly many advisers suffer from Stockholm Syndrome. Ex-Liberal here after being a liberal my whole life. "
Abused Nolonger 18:35 on 13 Apr 22
"Obviously most advisers are coalition voters and will vote that way no matter what. How else can you explain this survey? The coalition government has almost destroyed our profession and industry, and most advisers want more??? Partisan politics and nothing else."
Mark D 16:24 on 13 Apr 22
"You are absolutely deluded to think the last 10 years would have been better under Labor than the Liberals but that is what the AIOFP want you to believe. Unless the AIOPF want you to vote for Clive Palmer..."
Chris 15:53 on 13 Apr 22
"Advisers wanting recognition of prior "experience" is just plain sad. You've come up under an arguably corrupt system, and want to perpetuate that image for yourself? If you can't meet the new education standards you should be removed from the industry period. If this legislation ever passes I will advertise as a "Qualified Financial Adviser" who actually went out and did the study. I want to be the change the industry needs. I don't want to be seen as an old dodgy planner. Make no mistake, that is how a huge portion of the population views advisers. We should be banding together to re-brand this industry into a profession. Your "experience" in a dodgy industry shouldn't qualify you to exist in our new, professional one. "
Qualified adviser 15:32 on 13 Apr 22
"If the end figure stated by 2026 is 12,000 Advisers, they are going to need more staff, more time than the current 24 hours in a day provides, plus life coaching that involves deep breathing and the ability to say NO to 80% of the population who will need advice though won't be able to afford it. 12 million Australians needing advice would be 1000 clients per Adviser. Not sure every Adviser could handle this small amount of clients and still comply with all the BID Regulations, while espousing the; affordable quality advice mantra. The last decade has been one long series of analysis and opinion from every vested interest group, multi - Billions of dollars spent and where did we end up? No need to answer that one as we all are in a state of analysis paralysis. What a great system to abide by, though the optimist in me says things can only get better. "
Jeremy Wright 15:18 on 13 Apr 22
"You'd have to be stark raving bonkers if you want Hume and Frydenberg to continue the assault they've waged on the industry."
ex-Liberal 15:01 on 13 Apr 22