FASEA chief executive Stephen Glenfield refused to acknowledge the impact increased education requirements has had on financial adviser numbers during a recent Senate Estimates hearing.
Appearing before the committee, Glenfield was asked by Liberal Senator Amanda Stoker whether the authority acknowledged the risk of losing experience financial advisers for whom the requirements are simply too much.
Glenfield answered that it was FASEA's job to implement legislation, before Stoker interrupted, saying: "That doesn't answer the question. Do you recognise that the impact is to push experienced financial advisers out of the profession?"
Glenfield claimed he had "no evidence that is or isn't the case".
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Stoker followed up by citing figures that show thousands of financial advisers have dropped off the ASIC Financial Adviser Register since the beginning of this year.
Rainmaker analysis of the ASIC FAR shows, as of yesterday, there is 25,330 advisers practicing in Australia. This is down from a high of 28,863 in January, meaning 3533 have left the industry this year alone.
"I would suggest this is a significant drop that can expect to see continue to decline over the next year or so as an unreasonable approach to valuing CPD and industry experience kicks in," Stoker said.
"Tell me, is it not the case that the profession is losing around 6.4% of financial advisers a quarter?"
Glenfield took the question on notice and also failed to provide an answer on how many new advisers have joined the industry in 2019.
Stoker responded by asking how many new advisers sat the June 2019 FASEA exam.
"None. No advisers," FASEA standards director Amelia Constantinidis, who also appeared, said.
"That's correct. Zero new advisers sat the exam," Stoker responded.
"I think that tells us something about what this is doing to the profession."
She went on to say that FASEA's approach is "squeezing the grey hair... the people who can provide experienced, well-considered, context-driven advice to those who are young and coming through the profession."
Stoker provided case studies of some of the industry's longest serving advisers, including Group Financial Advising founder Paul Franklin who is now 72 years of age, and Association of Financial Advisers state director James Forde and Paramount Financial Solutions principal Wayne Leggett who are both 64 years of age.
All have over 30 years' experience but would need to complete, at minimum, five subjects in order to meet the requirements. Franklin and Forde must both complete a full eight-unit diploma, Stoker said.
She then asked whether it was fair to say the approach adopted by FASEA is not sufficiently recognising the service, experience and prior learning of people who are at the upper end of the profession.
Glenfield answered: "I would only respond that the legislation requires, as part of the lifting of the standards, that is was aiming to achieve, that advisers reach a bachelor or higher level of education."
"Except that FASEA has declined to meaningfully value much of the way that this profession learned, practised that learning, developed that learning, for all time until recently," Stoker responded.
Throughout the course of the exchange between Glenfield and Stoker, Australian Greens Senator Peter Whish-Wilson interrupted several times in defence of FASEA.
"They're trying to change a culture; that's the whole point ... in an industry that's been malfunctioning for some time. That's the point," he said.