Speaking to ifa, Hindsight Wealth co-founder and director Daniel Jones said that, given the banking royal commission, the incoming FASEA standards and the ageing adviser population, there will be a mass exodus of the industry.
“For a younger group such as ours, it’s a really good opportunity for advice firms that are going to get in there and follow all the laws and doing the education and come out the other side,” Mr Jones said.
“It’s going to be tough but, in five or six years, I just think it will be sensational and it will be awesome again.”
Mr Jones’ comments echo that of the SMSF Association, which says many of its members who are close to retirement could be forced out of the industry under FASEA’s proposed education requirements.
Under the new professional standards, advisers on the financial adviser register between 1 January 2016 and 1 January 2019 will have until 1 January 2021 to complete FASEA’s adviser exam, and until 1 January 2024 to complete an approved degree.
Fellow Hindsight Wealth co-founder and director Liam Price told ifa that he has mixed feelings about the banking royal commission.
While he thinks it is fantastic that there will be changes that will benefit the advice industry in the long run as a result of the royal commission, he’s also disappointed with the damage that it has done to the industry.
“I’m certainly disappointed in the institutions that have brought it to this end. But for us to get pulled into this and the trust of a financial adviser to fall even more as a result of it, it’s so frustrating to continually be in the news and for damages to clients and not having the client’s best interests at heart,” Mr Price said.
“I’m disappointed in the industry, but I want it to recover. I want it to be the profession that it should be, but I just don’t know what it’s going to take to get it back there. I don’t know what it’s going to take for the public to start trusting us again.”
One insurer on the acquisition trail said advisers are leaving NOW, rather than die a death of a thousand cuts to 2024 ! Same insurer says new risk business inflows are down 10 % to 30 June due to LIF. It is happening, but 70% might be a bit high
Haha! Well, there’s my retirement date mentioned right there in the article Jan 2021. I now understand that after 33 years in Jan 2021 I will be deemed no longer capable enough to service and support my risk clients. I will be unqualified (I am led to believe) to advise them further on their IP, death or trauma cover. There’s a very good reason for this apparently – I have not done the FASEA exam! How ridiculous is this whole malaise they are forcing us through?~! Sickening and stupid – I have no other words on that point. Who the hell do these jerks think they are? Why aren’t the politicians having to prove THEIR credentials OR certain people in govt depts? One rule for some, eh? Sickening – I’ll be glad to be out in 221 – if not sooner. Who will look after my clients who only want ME to look after them? The simple solution, of course (TOO simple for the govt clerks it seems) is to just get the bad advisers OUT. All the companies know who they are for cryin’ out loud! Just easier for these govt sods to collect their paypacket free on Friday and keep their head down – don’t try to do any REAL good for the people.
Being on the younger side (late 30’s) I can see the medium to long term having better potential for a successful career. However the impact on advisers nearer to retirement should not be ignored as many other advisers/commentators say ‘either adapt or leave’. Much easier to say in your 20’s, 30’s and maybe 40’s. Less people need to jump on their high horse and see these changes from other peoples perspective. What do we achieve if the majority of experienced advisers do end up leaving? In my opinion, probably not in our client’s best interests.
I refuse to buy into this fear and hysteria, and I don’t believe that 70% of financial advisers will end up leaving the industry. In the end, when push comes to shove, the majority of small business licensees will adapt to the new reality (as they always have in the past), because they’re a wiser, nimble, tougher breed and have seen it all before. From a personal perspective, the RC has had zero impact on our capacity to attract new clients as there is still a strong need for impartial advice, so it would be fair to say that we’re already enjoying ‘good times’ – we won’t be waiting five years.
it’s not hysteria – many of the stats and numbers being bandied around now are actually from surveys of actual advisers. unless the current proposal gets some watering down adviser numbers will halve…the exam is not a fait accompli and the study is not easy…this is a reflection that there are a greater number of Advisers sitting in the ‘older – ex life ins’ bucket than younger and they would have probably retired anyway. The question anyone older than 55ish is asking is “even if I do all the study and jump all the hurdles I don’t have the time in the industry to reap that benefit”…
love the optimism… just need to survive and not go broke in the next 5 years… might be blue sky.. but just not sure.. especially when we have an industry doing their best to to destroy our profession
Most of the older planners I have spoken to are going to leave the Industry which has been mortally wounded by the banks/insurance industry and the RC. They should all lose their licences !
The Industry will never recover from the loss of the experience about to be cast aside. Well done to all those responsible – you should be ashamed of your actions.
Seems like no one has a problem with pushing out older advisers – what is wrong with you people? Such a selfish world we live in – why am I not surprised – How about you don’t become an adviser unless you do the qualifications and have 20 years experience. Now the playing field is level.
For financial planners to move to the next stage, acting solely in the best interests of the client, they need to be individually licensed and individually accountable similar to other professions. There needs to be a governing body that oversees individuals and their conduct. With the understanding that you will never get rid of rogues, if there is money involved you will get crooks.
Is this guy on another planet? 70% of good advisers will be gone in 6 years and clients will face the prospect of only being able to afford advice if they are rich. The rest will go direct to the banks and insurers for basic products, general advice and little service. How will this be better??!!
I think this is going to be the change of all changes.I think dealer groups, platforms and investment managers will all look different and not be in the current structure they are in now. I also think there will be a heap of opportunity for younger advisers / owners like me in a few years time. Obviously it’s a very challenging time for advisers looking to retire in the next 3 years. Good luck all, see you on the otherside.
how? 70% of the industry will be gone by then
The only way the clients are going to trust financial planners is by getting the greedy banks to do the right thing. All the problems are caused by the banks and the small businesses have to face the brunt. The end result the banks will throw loose change to compensate; and in the process hurt all the small businesses to incur huge costs leading us to shut shop. The banks get more powerful. The saga continues on and on.