Advisers hoping for an announcement of an extension to the FASEA exam deadline were left disappointed after the Assistant Minister for Superannuation, Financial Services and Financial Services Technology, Senator Jane Hume failed to do so during a widely anticipated speech and the AFA conference in Adelaide this week. The industry remains hopeful however, and the Senator did not explicitly rule out an extension. However, another speaker at the conference, former Foreign Minister Julie Bishop highlighted the reality of where the industry currently sits.
The AFA chief, Phil Kerwin told delegates after Hume’s address that "I think like me you were hoping to hear a positive announcement today. You've heard Senator Hume is listening and the work we're doing around the FASEA deadline is having an impact..I was hoping for an announcement from the minister. But I think we can still be hopeful something's coming soon in that area."
As the Greek myth of Pandora's box illustrates, once the box is open - all that is left is hope.
Speaking to the Financial Standard regarding the possibility of a future extension, Hume Said "I think we can say that we have heard the concerns and some of my concerns around the deadlines are really more about accessibility." So making sure advisers have the ability to access the exam, rather than extending its deadline, would appear to be the priority for the government at the moment.
Hume continued, "...but we're listening to people when they say they're going to have trouble meeting them [the requirements] and we want to make sure we have a really sustainable financial advice industry,"
The Senator said she believed the current exam process was “fair and reasonable” at present and re-iterated that "We don't want to see mass exodus from the industry because of that.”
Regardless of any concern, advisers are leaving the industry at exceptional levels. As our analysis of adviser movements indicate, 2825 advisers have left the industry in the first 6 months of 2019 – a decrease of 11% from the peak adviser numbers on Jan 1 this year. With the IFA reporting news that hundreds of AMP financial planners have received a termination letter from the company this week, it would seem the trend of a reduction in overall adviser numbers is set to continue.
The former Foreign Minister, Julie Bishop was another speaker at the AFA’s conference on Wednesday. While she offered comforting words in support of the financial advice industry and bemoaned negative media coverage, Bishop did highlight the reality facing the industry. Referring particularly to legislation, she said it was just the beginning, with the government now committed to implementing all 76 of Commissioner Hayne's recommendations. "There will be a train of legislation coming down the track that will hit you all," Bishop told the conference.
Bishop said the reputational harm that has been caused by the unrelenting media coverage about certain bad behaviour has tarnished an entire sector of the community.
"A few bad apples shouldn't diminish the quality of the entire crop," Bishop said. While the “bad apples” line does get trotted out frequently and is appropriate in reference to the small minority of individual advisers actually doing the wrong thing – some would question whether that particular idiom holds true across the industry. After all, the Royal Commission highlighted the poor behaviours and practices, malfeasance, unethical behaviour and illegality that was displayed by a range of institutions as well as individuals. Good apples won't last in a rotten barrel.
With “a train of legislation coming down the track" that will hit the industry, the reality is that many advisers will pull up stumps. No amount of wishful thinking or supportive words seems enough to alter that fact.
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