Specialist consultancy a possible answer for older threat advisers
Older, seasoned risk advisors could find an alternative way to stay in the industry without meeting the training requirements, as the Australian Financial Advisory Network (AFAN) plans to take on risk advisors as advisors.
Craig Ball and Ian Macpherson founded the Australian Financial Advisory Network (AFAN) as a collaboration of specialists (e.g. geriatric care, estate planning, risk, age and financial planning, commercial and personal loans and general insurance) and authorized planners providing a business platform that allows risk advisors to stay in the industry.
The advisors had until December 31, 2021 to pass the Financial Adviser Standards and Ethics Authority (FASEA) exam in order to continue working and providing advice.
“Obviously some will be able to sell their books and I expect they will be more than happy to leave, but many will go without buyers simply because of the volume of sellers in the market,” Ball said .
“Since they are no longer empowered to give advice, by joining AFAN they can continue to work as AFAN advisors with their clients.
“They can take part in customer reviews with a representative authorized by AFAN, make factual statements about the customer’s insurance contracts, help with claims and administrative inquiries, etc. The only thing they can’t do is say, I recommend.”
The ex-risk advisor, now a consultant, would maintain the customer relationship.
“Many, in some cases, have built very trustworthy relationships with their customers over decades,” said Ball.
“If we were to just buy your book, it would take us years to emulate and, as you know, the rate of customer drop-offs during a takeover is relatively high.
“Maintaining the relationship through the ‘advisor’ ensures a much higher persistence rate.”
AFAN would reward consultants by passing on 70% of the ongoing trailing income, and any consultant who joined was guaranteed to receive that trailing income for at least five years.
“Ideally, we would like our advisors to stay longer, but even if they choose to retire, they will become members of our AFAN community,” said Ball.
“The AFAN community enables our retired consultants to continue sharing their knowledge and expertise with young planners who are making their way through the ranks.”
