The number of advisers on ASIC’s Financial Adviser Register has achieved another milestone, falling below 17,000 with more advisers that have not passed the adviser exam coming off the regulator’s listing of licensed advisers according to Wealth Data.
The net change of advisers for the week is 132 bringing the total on FAR to 16,912.
Wealth Data director Colin Williams tells Professional Planner this was an issue raised by the Senate Economics Committee to ASIC earlier this year.
“There is a strange setup with ASIC and there’s a huge weakness when it comes to the self-licensed side,” Williams says. “Fundamentally, if you’re a self-licenced adviser your job is to do everything including dobbing yourself in when you do something wrong.”
ASIC told the parliamentary committee it had conducted a review of the FAR to check AFSLs had made the required notifications if an adviser they authorised had not passed the exam.
Licensees are required to report within 30 days when an adviser is no longer licensed. The deadline to pass the adviser exam was at the end of the 2021, which led to a significant drop-off at the end of January.
Williams says most of this week’s departures were not holistic financial advisers.
“The vast majority are not actually providing what I would call traditional financial planning/advice. Financial planning, for all intents and purposes, is a part-time job for them or something they might need to do from time to time. Many of them are accounts or investment advisers.”
In April, Adviser Ratings predicted the industry will go below 15,000 advisers by the end of the year.
Rise of the self-licenced
This week also saw the effective closure (defined by a reduction to zero advisers) of 47 small self-licensed AFSLs.
Williams says most of the losses this week were licensees giving limited advice and the self-licenced holistic adviser segment has seen significant growth this year.
“Whilst [limited advisers] are the ones that are closing, the ones operating on the financial planning side are actually growing rather rapidly now.”
Williams says he is seeing two to three new self-licenced advisers added to the FAR each week on average which amounts to over 50 for the year.
“They’re still growing and I can’t see that slowing. On the financial planning front self-licenced is no longer a fad. It is a trend and it’s very hard to see that trend changing any time soon.”
One Adviser leaving the Industry due to unreasonable Regulations is a tragedy.
Thousands of Advisers leaving the Industry due to unreasonable Regulations, has become a statistic.
There seems to be a focus on numbers and not on what this actually means.
The cost of Advice rising is one thing. What about the reality that thousands of experienced Advisers who made incredible differences to their clients lives, based on real life experience, which can NOT be gained from theory, are gone for ZERO positive outcomes for Australia and the millions of Australians who will not be able to get advice.
We have a situation where the ship has sprung a leak on the port side and rather than do some minor repairs, we left it and upon the minor leak, having been ignored for so long, has now become a bigger leak, upon which a committee of people with no experience in ships, is assembled on the shore and without taking into consideration of how ships work, or the environment they operate in, decided that the way to even up the slant, is to make a similar size hole on the starboard side to even the ship up.
Then upon the ship starting to settle lower in the water, the committee then decide to have extensive consultations over an extended period to look at remedying the situation.
In the UTOPIAN world that many vested interest groups operate in, where a leak, to them, is a theory with little consequence, then copious committee meetings is acceptable.
However, in the REAL world that Advisers and Advice Practice owners operate in, constant meetings without cutting to the chase and fixing things, has real implications.
Eleven thousand Advisers and counting, exiting the Industry, is eleven thousand ships sinking, taking their cargo’s and crew to the bottom of the sea, which has had real life implications.
When are the REAL issues going to be fixed, or will we continue on the merry go round of theorist fixes by creating more holes.