MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
www.moneymanagement.com.au
Vol. 36 No 1 | February 10, 2022
MANAGED ACCOUNTS
Understanding the complexities
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MODEL PORTFOLIO
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Construction mistakes
ADVISER SENTIMENT
EDUCATION
The professional year
The danger of young advisers utilising experience pathway BY LAURA DEW
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A year to take a breath AFTER the last difficult couple of years, filled with regulatory change, it looks like 2022 might be a year in which advisers can take a breath, according to many. Advisers should take advantage of it by focusing on what the core of their business is really about, spending more time with their clients and finding solutions in the challenging environment. This would also provide a good opportunity for them to look after their business processes, succession planning and improve their system efficiency. Ben Marshan, head of policy, strategy and innovation at the Financial Planning Association of Australia (FPA), said the implementation of the Royal Commission’s recommendations had introduced a number of new processes that were often pushed onto adviser businesses but, in return, had created additional paperwork and inefficiencies. “This is really the main thing planners should be focusing on this year. They met the education requirements, they’ve gotten through the Royal Commission period and now it is time to think about their businesses. “The last couple of years have been a little bit dramatic [for advisers] so it is not surprising that they are still worrying that there is more to come but the reality is that probably isn’t.”
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PARAMETERS need to be in place with the adviser experience pathway to prevent young advisers with minimal experience from qualifying for the exemption, according to the Financial Planning Association of Australia (FPA). Speaking at a roundtable, FPA chair, Marisa Broome, said the association had received around 2,500 responses to its consultation on the experience pathway, representing more than 20% of its membership. This would see advisers without degrees but with more than 10 years of experience, exempt from the education requirements and only required to complete an ethics module. The issue had “polarised” the membership, she said, with
members unanimously agreeing it was a backwards step. While they agreed there had been a lack of recognition for advisers’ experience in the past, they disagreed the proposal was the right way to go about rectifying this. Specifically, there was poor support for implementation of the 10-12-year pathway . Broome said: “It could mean that an adviser aged 30 with 10 years experience could practice for another 30 years without any adequate formal tertiary qualifications. For attracting new entrants and for general professionalisation can’t be good for a consumer perspective. You need to have some parameters around who qualifies for the experience pathway. Continued on page 3
Extra costs likely if wholesale test amendments go ahead: SAFAA RECLASSIFYING clients who previously qualified as wholesale clients will be detrimental in a time of declining adviser numbers, according to the Stockbrokers and Financial Advisers Association (SAFAA). In a discussion paper ‘Does the wholesale investor test need to change’, the association said there were many firms who had adopted a business model of solely servicing wholesale clients and would be negatively impacted if these clients were instead classed as retail investors. “With business models relying on the definitions in structuring their businesses to meet client demand, change will bring disruption and attendant costs associated with implementing change”, the report stated. “Licensees have aligned their business models to the current Continued on page 3
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