MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
www.moneymanagement.com.au
Vol. 35 No 3 | March 11, 2021
20
ESG
Exposure to miners
ASIA
22
Five areas for growth
Factor investing
Advisers told to charge what their advice is really worth
EDUCATION
BY MIKE TAYLOR
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FA-SEE-YA “DISAPPOINTMENT. The one word I’d use to explain the FASEA story,” said Dante De Gori, FPA chief executive. The Financial Adviser Standards and Ethics Authority (FASEA) may be gone but its legacy will last for a long time yet. The removal of FASEA has done nothing to change education requirements, however the industry associations and licensee groups are still working behind the scenes on the code of ethics, continuing professional development requirements and recognition of previous experience. Just over half (52%) of advisers have passed the FASEA exam in nine sittings. The 10th sitting was completed in January, leaving only five more available this year for advisers to complete before the 31 December, 2021, deadline. As more advisers pass, frustration towards the exam has reduced, although many advisers have repeatedly failed and are anxious to meet the deadline. Older advisers with decades of experience are still frustrated by the degree requirement: education is time consuming and expensive, even with Government financial support. If this issue isn’t addressed, there will be an exodus of talented and experienced advisers who maintained a clean record throughout their careers but are left to become unnecessary collateral damage. “If we want to create a profession that only the very wealthy can access then what we’re doing is great,” Eugene Ardino, Lifespan chief executive, said.
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TOOLBOX
Full feature on page 16
FINANCIAL advisers should not be unilaterally cutting fees in a race to the bottom. They should instead be charging fees which accurately and profitably reflect the value and complexity of the advice they are providing. At the same time as the Australian Securities and Investments Commission (ASIC) is conducting its affordable advice review and as Government ministers have canvassed broader use of general and intra-fund advice, advisers have been told that too many of them are simply not charging enough to ensure they are sufficiently remunerated and profitable. What is more, the advisers have been told that they should be regularly reviewing the adequacy of their fees in circumstances where
some are doing so as infrequently as every five years. Speaking during an AIA Australia adviser forum, Peloton Partners chief executive, Rob Jones, said that there was a tendency by advisers to want to push costs down when dealing with hard-pressed clients, but that they needed to understand and explain the cost of the advice they were providing. He said there was a need to properly cost the service, value and complexity of the advice that was being delivered. Jones said that advisers needed to understand that clients were not being forced to obtain financial advice and were doing so on the basis of a “self-selection process triggered by specific events or needs including a lack of understanding of financial-related matters”. Continued on page 3
ASIC urged to use ATO and super to reunite unclaimed remediation monies THE Australian Securities and Investments Commission (ASIC) may think that unclaimed client remediation money should go to charities or not for profit consumer groups, but superannuation funds have other ideas – they want it directed, via the Australian Taxation Office (ATO), to superannuation. In fact, the superannuation funds want unclaimed remediation monies to be directed to the specifically identified clients via the ATO superannuation register and then into their active superannuation accounts. In a submission to ASIC’s current consultation on Consumer Remediation, the Association for Superannuation Funds of Australia has made clear it does not see ASIC’s proposal for licensees to lodge unclaimed monies with a “charity or no-for-profit registered with the Australian Charities and Not for Profits Commission. Continued on page 3
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