Banks snap up new AFAs

More than a quarter of the people who registered as authorised financial advisers for the first time last year went to work at one of the big banks.

Monday, May 8th 2017, 6:00AM

by Susan Edmunds

Financial Markets Authority data showed that 117 new advisers became authorised in the year to June 2016.

About 80 left.

Most AFAs - about a third - were working for a qualifying financial entity.

Further examination of the data shows that 32, or 27% of those 117 new AFAs went to work at one of the big four banks. Fourteen went to ANZ, nine to BNZ, two to Westpac and seven went to ASB.

Other significant recruiters of new advisers were AMP and its Advice First channel, with five, Craigs Investment Partners, with seven and OMFinancial, with nine.

Milford gained four, Camelot one and Rival Wealth two.

David Boyle, who is group manager of investor education and retirement villages at the Commission for Financial Capability, but who previously headed ANZ's distribution, said it was not surprising that banks were active recruiters.

“I would suspect banks are working harder in this area especially given the changes in the legislation coming up. Focusing on new AFAs would seem about right and I suspect many are getting more trained up through their system,” he said.

“I have also watched with interest a number of ex-bank staff joining established advice insurance or mortgage companies.”

David Greenslade, of Strategi, said he saw about 400 people enter the industry through his firm's courses, each year.

“Of those, the majority were mortgage advisers who have to do the Residential Property Lending Strand but do not have to become AFAs," he said.

"Of that 400 total, there were about 100 people who were completing the level five qualification to specifically become AFAs. These people would be split between joining a bank, joining a large sharebroking firm or joining a non-aligned financial advisory business. My guess would be about 50% of these join the bank, and then the other 50% is pretty evenly split between sharebroking and non-aligned.”

He said banks were recruiting existing AFAs, too. “They have deeper pockets so recruit these higher-paid advisers in a greater number to that of non-aligned entities. The small IFA market often cannot afford to recruit AFAs directly so they take on RFAs and then over time, they upskill and become AFAs."

Tags: financial advisers