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Adviser sentiment cleaving to liferaft By Mike Taylor
Figure 1 Financial planner sentiment index 60 53
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AS debate heats up over the Australian Securities and Investments Commission’s (ASIC’s) proposed educational guidelines for financial advisers, training providers argue that a push for higher education will not fix the inherent discrepancies in educational standards. In an effort to lift industry assessment standards, the Financial Planning Association (FPA) is currently requiring all new advisers to have an approved degree from 1 July 2013 in order to be recognised as an associate financial planner. Pinnacle managing director John Prowse believes a key element in raising the standard of adviser education is recognising that the Diploma of Financial Planning (the current benchmark) has been carelessly issued by some recognised training organisations (RTOs). Training regulators often allow some RTOs to use a “tick and flick” method for issuing diplomas and certified professional development (CPD), he said. Under the proposed threetiered approach outlined in ASIC’s consultation paper (CP) CP153, financial advis-
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Source: Wealth Insights
Continued on page 3
33% 17%
15%
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15%
Average Good/ Very good
29-30th Nov'11
1st-2nd Dec'11
Source: Wealth Insights
“Adviser sentiment is generally still lower than when we last conducted our survey in October, but the result for December is markedly better than it might have been – largely because of the more positive news around central bank intervention and the impact on share
ers will be required to complete a national examination assessment, a 12-month supervisory period, and a knowledge review within two years of undertaking the exam – and every three years thereafter. Prowse said he has long supported ASIC’s proposed national exam because there is an inherent conflict of interest involving educators who set their own training requirements. However, this issue does not get resolved by making university-level education the minimum requirement for all financial planners, he said. “If you set a standard and don’t police that standard, it doesn’t do any good to set the standard in the first place,” he said. A three-year degree followed by a year of supervision is too excessive for a normal financial planning job, he added. According to CP153, the regulatory body does not currently “have the expertise, or the resources, to administer a national exam”. It has proposed “outsourcing the administration of the exam to a commercial exam provider, through a tender
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Planner education needs consensus By Andrew Tsanadis
Figure 2 Are times good or bad for you ? ASX All Ordinaries Index
THE degree to which Australian financial planners are looking for more optimistic signals amid the current torrent of bad news has been revealed in new research released by Wealth Insights. The Wealth Insights Planner Sentiment Index for December revealed sentiment plumbing levels not seen since the Global Financial Crisis, but the surveying process also revealed the degree to which advisers seem to be looking for better news. Wealth Insights managing director Vanessa McMahon said that amid last week’s more positive news around European Central Bank intervention and the consequent improvement in share markets, adviser sentiment had improved markedly.
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markets,” she said. The Wealth Insights research has consistently revealed a close correlation between Australian financial adviser sentiment and the fortunes of the Australian Securities Exchange, and McMahon said this had been strikingly
confirmed by the spike recorded mid-way through the December survey process. This was something that had been evidenced by the significantly different responses from survey respondents between Tuesday and Wednesday last week, and then Thursday and Friday. Asked whether times were good or bad right now, the survey revealed a 20 per cent spike towards positivity on the latter two days, and after the more positive news on Central Bank action. Despite this spike in positivity, McMahon pointed out that the overall planner sentiment remained at levels not seen since the depths of the global financial crisis in late 2008. She said that, in short, Australian financial planners were closing out 2011 feeling generally pessimistic about the immediate outlook.
Merger threat to platform FUM By Chris Kennedy Industry consolidation, particularly involving large dealer groups, has the potential to shift large volumes of funds under management (FUM) from current platforms into products aligned to the new institutional owner. Questions were raised last week as to what will happen to the large volume of FUM in white-labelled BT products through Count Financial once new owner Commonwealth Bank takes over. Money Management understands there is also significant FUM allocated to BT products through DKN advisers who are now aligned to major platform provider IOOF, while AMP has large volumes of assets in BT products and Westpac-owned Asgard, which it
Mark Kachor could theoretically begin to shift towards newly-aligned AXA products such as North. News that BT had sent a communication direct to BT Lifetime Flexible Pension members giving them the option of setting up an advice fee for personal financial advice to replace the existing fee arrangement (consisting of an upfront and ongoing commission) drew more than 30 comments on
Merry Christmas This is the final print edition of Money Management for 2011. The entire team at Money Management wish our readers a merry Christmas and a safe and prosperous 2011. The first print edition of Money Management will be published on 19 January 2012. In the meantime, readers will continue to receive Money Management’s daily e-newsletter up to and including Friday 16 December 2011 before it resumes on Monday 9 January 2012.
Money Management’s website. Several advisers expressed disappointment that BT had contacted clients directly, and some suggested it was a move aimed at disconnecting clients from their current advisers to either reduce payments to non-aligned advisers or to create “orphan” clients that it could then acquire. But a BT spokesperson told Money Management the sole reason BT contacted clients directly was its disclosure obligations, and was completely unrelated to the acquisitions of DKN and Count. Mark Kachor, managing director of research house DEXX&R, said that ultimately it would be reasonable to expect that CBA would look to migrate the BT Continued on page 3