Ten thousand people have left this industry and now it might be too late
Exam and degree requirements were key parts of controversial financial advisor education reforms, introduced by the Turnbull government in 2017 amid calls for a royal commission on industry misconduct.
The government on Thursday released a proposal to allow councilors with more than 10 years of experience to graduate, matching a pre-election pledge from Labor Party Stephen Jones revealed by The Australian Financial Review this month.
The government will also expand a scheduled advice quality review, recommended by the Hayne Royal Commission, to focus on the affordability and accessibility of advice after the median price charged climbed 30% in two years under the weight. increasing regulation.
The review, which is due to report by December 2022, will attempt to “streamline and simplify” laws governing financial advice, which commentators including Joe Longo, chairman of the Australian Securities and Investments Commission, have admitted. ‘they are too complex.
“Leading planners are gone”
It will also examine “the processes by which investors are referred to as sophisticated investors and wholesale customers” – a long-criticized loophole that deprives customers of at least $ 2.5 million in consumer protection assets. .
Retired Sunshine Coast planner John McIntosh said the government’s backsliding on the degree requirement was good news for remaining planners, but “too little, too late” for those who have already resigned.
“It’s a shame,” he said. “Some of the very high level planners who really knew their stuff just left. “
The anger of retirees who felt kicked out of the industry by the burden of compliance was exacerbated by Crestone’s successful bid from LGT Group, a Liechtenstein-based asset manager chaired by the nation’s crown prize. European, Maximilian.
As a ‘wholesale-only’ business that advises exclusively clients with personal assets well above the sophisticated investor threshold, Crestone is not governed by the same regulatory regime as businesses that advise regular retail clients. . He doesn’t have to comply with the education edict, for example, or provide lengthy notice documents (SOAs) to clients.
Mr Phillips said his family business, started with his father in 1979, was almost bought by an offshore private investor for around 1% of the value of the Crestone transaction – but the buyer pulled out due to of “all disruption” in the retail consulting industry after the royal commission.
Instead, he rushed to sell his business last year, as the January 2021 deadline for taking the mandatory national exam loomed.
“I could have lasted longer, but I didn’t have the energy and I had to focus on my family,” he said, noting that keeping up to date with changes in regulations was in effect. itself an exhausting part of the job.
He said he was skeptical that the Coalition or Labor would actually cut red tape once elected. “We have already heard promises without any follow-up,” he said.
Meanwhile, those who remain in the industry were divided on Friday over the merits of the Treasury proposal.
Judith Fox, chief executive of the Stockbrokers and Financial Advisers Association, said the proposal “restores common sense to educational standards for the benefit of Australians in need of sound financial and investment advice.”
But Marisa Broome, president of the Financial Planning Association – which has long advocated higher professional standards – said that while prior professional experience is to be recognized, “great care should be taken with any proposed change in educational standards. “.
The Treasury is seeking comments on the education exemption and the terms of reference for the advice quality review until February.