Australian Advisory’s latest research paper showed the results of a survey undertaken in August by 160 specialists in the financial services industry on the back of news that the total number of advisers has dropped below 19,000 to look at the major issues concerning advisers right now.
“I have never seen tougher times for advisers than right now,” Australian Advisory principal Mark Dorling said.
The results showed that compliance is the biggest concern for advisers (42 per cent), followed by the future of the industry (37 per cent) and costs (25 per cent).
The general feedback from respondents was that compliance has become too complex and that there is too much regulation and red tape.
Because of compliance, respondents also said that administration time has significantly increased and it is becoming “increasingly difficult” to keep up with the ongoing changes.
Furthermore, more than half of the respondents (52 per cent) were thinking or have thought about leaving the industry. Of that figure, 48 per cent have considered selling their business, while 4 per cent were likely to just walk away.
“From our survey and subsequent follow-up conversations with these advisers, it is obvious to see the concern our industry professionals have about the ongoing viability and future of providing financial services,” Australian Advisory said in the report.
“There is a lot of angst, anger, frustration and stress for our industry and, quite frankly, advisers have had enough.”
In a recent episode of the ifa Show, Lifespan Financial Planning CEO Eugene Ardino called on the government to “stop talking” about assisting the advice industry and to act.
Following a range of new regulations relating to subjects such as information sharing and hawking coming into effect this week, Mr Ardino said more needs to be done to help both advisers and consumers.
“Advisers and licensees, while we are in this legislation expansion phase, all we can do is put on more resources to meet those requirements and pass on those costs to consumers,” he said.
“What else are we supposed to do? It’s the government who is saying they’re serious about making advice more accessible. Well, they need to do things. They need to stop saying that and actually do serious things, drastic things to achieve that; otherwise, we just keep going down this path.”
Listen to the full podcast here.
I have just completed the Kaplan content on “informed consent”. How these people are suggesting an Adviser go about showing evidence sufficient to prove to an interested party that the client gave it – is so illogical, contradictory and nye on, impossible (ie read the clients body language!) – that it is like a Monty Python sketch.
The whole damm process needs to be torn up and the Regulatory bodies need to start again.
The process is sunk, it is a farce, it does not work and pensioners are still be robbed of their houses by the likes of Sterling First Group. Meanwhile, we are becoming experts in reading body language.
Agree with all comments here. I also doubt there are 19000 advisers left giving advice. The people in real need no longer have access to a financial planner and certainly not at reasonable cost. It’s now a unethical industry to serve in as no longer can you afford to help those who really need help even if it’s just a claim and they are not your client. I couldn’t bear the torture of stupidity and the stress took it’s toll. I’m out n so relieved I’m out. My family has a father now.
The industry is now lost between ideology and the reality. People making decisions have no idea and the industry bodies have failed the small business planning firms.
Client value what we do as well as the advice that we provide. Why is it that politicians and regulators do not see this?
I’m disillusioned and have decided not to continue beyond 2026. At 52, why would I invest in further education after a 30 year career in this industry?
The industry is complex.. it is full of red tape and to be honest with you.. if we make one wrong move, we can end up in jail or massive fines.
I CONCUR 100%. I am 60 and a risk adviser of 36 years. No client co plaints ever. I am selling up right now. i expected to stay until age 70 or health gave out or until I wasn’t having fun anymore. Well, that final parameter has become real. Compliance, irrelevant expensive exams (in time AND money) have pushed me out a decade early. Lord willing, I will find an adviser to sell to who will care fir my clients as I do. Most of my clients are very upset I am leaving and have nothing but disgust for the pollies, special interests and life companies that have created this untenable mess, FARCE-IA TOO.
If you were the government and there was an industry that actively sort to reduce your revenue (tax obligations), increase your expenses (government benefits), and help individuals betterunderstand their rights (legislation), would not you want that industry gone too?
If you want to succed in this industry it’s deliving more value to your clients than they expect . It’s a simple truth that has stood the test of time.
Good luck and stay strong!
Wow – never thought of it like that. You’re implying the government want people to mess up their finances so that they pay more tax and get less social security…?
Dear Comrade, Yes…..but at the moment not fully..cause the full version is the Labor Party model where ultimately you end up on Social Security and the lucky ones all end working for the Government employed as Nurses, School Teachers, public servants or working in a Union run factory, adding to Union run super funds which go back to Labor.
Hello Comrade, how do you factor in that most of this has been put in place by the LNP??? After all, they’ve been the government for the past 8 YEARS….
No, the real reason is this. How much $$$$$$$$$$$$$$$ is there in Superannuation Product? Answer, a lot and Industry Super simply wanted Financial Planners out of the way – it is called eliminating the competition.
Liberals simply do not have a clue. Josh Frydenberg in 2018 did not even know Industry Super Funds were related to Labor and did not care that FUM was flowing from retail to Industry Super.
The venn diagram of Josh Frydenberg & not having a clue is almost a perfect circle….
It also helps to explain the government’s support for housing and less for equities. Treasury and government view property as a fantastic revenue generator eg stamp duty, council rates, land tax, cgt & income tax etc and with interest rates being so low tax minimisation strategies have less of a sting for treasury.
While equities may be viewed more as a ‘cost’ to the government as smart investors often use them to minimise their SMSF tax liabilities and claim money back from the government.
IMHO
I’ve said this for years…
Sure but on that basis why are Accountants not killed by the regulators are they manage the tax affairs of businesses & individuals to significantly reduce tax paid ?
And more so Accountants can happily give illegal AFSL advice, eg SMSF Advice and ASIC have never once busted a single accountant for this.
…that’s because there’s no proof (SOA doc) to show….
Government doesn’t touch accountants because they collect 80% of the taxes for the government! This observation was made to me by a lawyer. Ring of truth to it?
Don’t expect any softening of the regulations as this will be seen to help adviser the bad guys and less consumer protection. This will cost them votes and wont win them any, so why would they make it easier for us and harder for them. It is all about votes and getting back into power, so there wont be any softening just lots of lip service.
Why don’t ASIC conduct market research and survey 1000 clients and find out what they actually want from an advisor. I dare say the response would be vastly different to all the rubbish they are currently provided
They’ve written the report with what they want the answers to be, now they simply need to find those clients.
you don’t have to be einstein to know this
All I can say is Money Coach….(or write a book), say what you want, add a few disclaimers, no responsibility, no compliance, no audits, no SoA’s, no ASIC!! Sounds like the way to go!!
We need to stop this talk about being a “profession”. That is a sign of insecurity and small mindedness. Unfortunately that mindset dominates this field. The bar to entry should have been raised years ago. Once that is established we need a united front to aggressively take on govt and regulators. Why hasn’t the issue of self regulation for accountants been raised or lack of disclosure by doctors regarding referral arrangements? The reason, our clownish representatives are too timid when facing the regulators or politicians. They prefer the moronic happy heads photos opps rather than the hard bargaining that’s required. Advisors are also too blame as they too reluctant to rock the boat or support anyone who is more confrontational.
Karl I think you’ll find your representatives are not timid, they’re conflicted, in that to indirectly quote the FPA CEO they have to represent the Barefoot investor, AwareSuper, The Banks, AMP, the Adviser, the 20 year girl on Tik Tok, and everyone equally….that is probably the biggest problem we’ve got is those conflicts.
They need to represent their members – who should be licensed advisers. This however would reduce the amount of wages which are able to be paid to the representatives.
but in the case of the FPA there members are HestaSuper/AwareSuper who provides the FPA with an excel sheet of their advisers names and one big fat cheque….and of course other advisers…hence the conflict as to keeping advisers happy and keeping Hesta happy that wants you replaced with a call centre.
the cost, the stress of constant compliance changes, DDO, Fasea, the list is never ending the enjoyment of helping people and solving the puzzle is no longer there. I spend more time on the governments requirements than I do on my clients needs which means less revenue, as a small business owner this is not sustainable. so after 23 years without a single complaint as a Financial Advisor,…the hard decision I’m leaving the industry,
Keep the door open. I’ll be right there in just a minute. Just grabbling all my certificates and degrees off the wall.
Attacking non-aligned financial advisors has been the objective for Josh Frydenberg and the Liberals. They have almost achieved what they want – to make us redundant due the the insane costs in providing advice. And these costs are driven by the Liberal taxes (ASIC levy, COSL, etc) and Liberal red-tape.
They want intra-fund advice from super funds, and robo advice from banks.
.
Having left for all of these reasons, it is very nice not to have all that stress over my head anymore. Best luck to those determined to stick it out to provide much needed advice to Australia.
The system is becoming so complex it sets up advisers to fail and Big Brother is watch you, who is keeping ASIC accountable?
Frydenburg…
DDO, Fasea, Breach Reporting, Ongoing Service Arrangements, Complaints, Education Requirements……the list goes on. And then add the discussions with clients as to why their fees are increasing, it all adds to the stress. All of these are acceptable to advisers and we understand the why. However make all these changes at once and it’s no surprise to hear advisers are leaving.
forgot to add the Instos adding their bit to the additional red tape requirements by demanding advisers upload SOA’s and FDS’s to the account holders document library – and this is from the same hypocritical Insto’s that have been done for remediation – it’s a one way street
Wasn’t this ASIC’s, their union fund mates and the government’s goal all along? So why would they change anything now?
all talk, no action
I’ve stayed committed to the long term future as a planner and my business but I am more and more thinking about what else I can do to support my family as the flow on effect from all the regulation and cost increase is less quality time with my family and more difficulties in supporting my family financially. I simply have to find more time to work to keep up to ensure I have enough money flowing through and this causes me to be more stressed more often making me less present with my family who are the people I’m doing this for.
Agree advisers have had enough. Having to pay for the disaster caused by the big end of town now with ASIC levies and DDO has taken the admin burden (for no benefit to the client) to a new level of craziness. I am out of here. It is just not worth the stress. There has to be a better life than this.
This is what the banks want, us to all leave they come back in at bargain base price and offer general advice.
Must admit it consumes a lot of energy to try and stay positive