The most urgent conundrum facing those Advisers who have not yet passed the FASEA Exam

Hi, the most urgent conundrum facing those Advisers who have not yet passed the FASEA Exam is protecting their client book if Minister Jones does not move quickly enough [or does not move at all] to change the rules.

Being a Regulation, the Minister does have the power to amend it without Parliamentary input, we are however currently lobbying to get it amended but cannot obviously guarantee outcomes.

It always makes sense to have a plan B just in case things do not go according to plan, this in no exception to that rule.

Two issues to note and be aware of –

  • the so called ‘cliff’ is October 1st, not any time in September.
  • Exam 19 is for November, despite that you may register from September 23rd [therefore before October 1st] the key date is passing by October 1st.

The critical issue facing Advisers is what happens to their book if they do not pass the Exam and lose their ‘existing adviser’ status.

  • If this happens the Advisers revenue will be terminated from October 1st by the Manufacturer, no doubt kept by them and your clients will become ‘orphans’…..not a good outcome for the Adviser.
  • If the Adviser does not feel confident passing the Exam and decides to sell their book before October 1st, the market will more than likely to be saturated with other book and the price will be lower due to supply and demand influences – not a good outcome for the Adviser.
  • If the Adviser operates a boutique practice and must employ an Adviser to be the ‘Existing Adviser’, it may not be a positive economic outcome – again not a good outcome for the Adviser.

A solution could be the following –

We have an AFSL holding members who are prepared to do the following –

  1. Hold your book under their AFSL whereby legal agreement you are appointed as the ‘administrator’ of the client cohort and paid a very similar consulting fee to what the book You obviously cannot give advice to the clients, but you are their administrative person looking after their other needs.
  2. A modest fee is agreed upon to cover the AFSL’s costs.
  3. This will give the Adviser time to either sell their book in a better market or restructure their practice to suit the circumstances.

If interested in either side of the equation please send me an email.

Hi, further to the below email about Advisers who do not pass the Exam considering their options, here are some comments from Members –

  1. A member has termed the person a ‘CLIENT RISK SERVICES MANAGER’ employing the Adviser on a contract that equates to the Advisers book revenue.
  2. Advisers who are currently an AR to a Dealer group can easily transition into this structure within existing arrangements. Many are offering this facility, just ask them for details.
  3. Advisers who are either unhappy with their current Dealer group, currently an AR to an Institution or operate their own AFSL with no other Adviser in the business, are candidates for looking at the proposed arrangement.
  4. There are many members who want to buy books that can provide transitional facilities, negotiate terms on price and exit strategies upfront that should relieve the stress of making hasty decisions in a buyers’ market.


Peter Johnston | Executive Director
Association of Independently Owned Financial Professionals
Suite 1211, 1 Queens Road, Melbourne VIC 3004
P 1800 111 203, d 03 9863 7574, m 0418 857 621 | Download my business card

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