Property Funds Management chief executive Barry Daniels said the crisis was driving advisers to the brink of burnout given the effect on their work-life balance and mental health.
“Planners who normally work long days have been asked to double their efforts working even longer days and through weekends in order to deal with the increased volume of calls and enquiries,” Mr Daniels said.
“The coronavirus has been the ‘black swan’ event that has revealed the gaps and monumental shortcomings of the current financial services system.
“At a time when professional financial advice has never been more important or needed by so many Australian consumers in desperate need, it is unaffordable and worse, there simply aren’t enough practitioners.”
Mr Daniels said the liquidity crisis currently being faced by the super sector also had part of its roots in the over-regulation of advice, with too few consumers having access to a financial planner to advise them on the long-term consequences of early super release.
“Another ‘black swan’ is the concern about liquidity and ability of super funds to handle in excess of 700,000 applications for earlier release,” he said.
“Had there been more planners, they could have provided much needed advice and support that would have been of immeasurable value to both the members and super funds.”
Mr Daniels said the crisis should give regulators the opportunity to reflect on the red tape currently hampering the advice industry and actions that could be taken to prevent a further adviser exodus.
“While time is still on our side, I call on the federal government to undertake a review of financial services looking through the lens of a perfectly imperfect world,” he said.
“To back test the real impact of reform that has failed so appallingly when it was needed most, in the context of ensuring a strong, viable financial services industry and affordable advice is available to all Australians.
“Finally, to take steps immediately to limit the risk of losing more professional planners from the ranks of an industry that needs them so desperately at this time of need and in the future.”
My head feels like its exploding with the volume of change that we are trying to ram through, study, covid, FASEA, not being able to see client face-to-face but the need to get them onto annual agreements, revenue drop, staff stressed. There’s been several times when I’ve thought about simply walking away from my 20 year investment of time, study and resources. But I’d leave 13 employees in addition to myself without an income. Clients would be left to fend for themselves and I know they’d get taken advantage of by unregulated advisers. We defend and protect them from con-artists and scammers now. Who will they turn to when we’re gone? The thing that scares me is I’m seen as one of the advisers to lead the industry for the next twenty years.
Yeah we’re on our way out too. What’s the point? We can all make just as much money doing considerably less work for literally anywhere else…
I applaud anyone who’s willing to keep going but I know for a fact here the grass is greener on the other side and no one should live their life like this.
Can someone educate me here… What do you need a planner for?… You have no money and need it to survive you take it from super. The consequence of the future issues is irrelevant at this point.
I have helped clients go in the right direction at no cost and given them a verbal warning, what advice would you provide on the other side of this?
Well, for starters, by ‘helping them go in the right direction’, if you are not a licensed person, you have broken the law. Superannuation is a financial product and advice is regulated. So WTF would you know if you are not qualified? You might have done more harm than good – you just wouldn’t know it. Do these people have insurance in super? Have they lost cover, less cover or have worse terms or exclusions by talking to you?
What advice would I give? Don’t advise anyone about anything ever unless you know what you are talking about! What, are you a Doctor and Lawyer also? Maybe you could help with medical and legal advice too.
Giving superannuation advice as an unlicensed person may be breaking the law. But ASIC has made it clear they have no intention of enforcing that law. That’s why hundreds of thousands of accountants, real estate agents, mortgage brokers, content writers, and super fund employees give illegal financial advice every day. They know ASIC will turn a blind eye. ASIC is far more interested in destroying the lives of licensed advisers, than they are in protecting consumers from bad advice.
Cool, understood. Also, ASIC often can’t detect it – it’s not just an issue of enforcement.
All fine until something goes wrong. Then, in most of those professions you mentioned, there are consequences and they’re quite pronounced – usually for the people “helped”.
ASIC could quite easily detect it if they wanted to. ASIC uses all sorts of spying techniques to persecute licensed advisers for minor issues. “Shadow shopping” being a common one. If ASIC did a shadow shop on any of the mentioned occupations they would easily find ample evidence of illegal advice because it is so commonplace. In some cases they only need look at advertising, websites, or promotional seminars to find evidence.
But ASIC doesn’t even need to detect illegal advice to stop most of it. All they need to do is publicly announce investigations and crackdowns against the offending occupations, and make a few prosecutions in the most obvious cases. The reason most of these occupations continue providing illegal financial advice is either because they are unaware it’s illegal, or they believe ASIC has given them an exemption from the law.
So this conversation thread started vaguely at;
“why do you have to get advice from a planner”
and then arrived here at an agenda point;
“It’s all ASIC’s fault, they don’t enforce the law” with pretty unrealistic examples of how they can do so and some fantasy about the belief in an ‘exemption’.
Really?
If they are your clients as you’ve suggested , perhaps you should be asking why they don’t have any cash reserves to survive for 3 months in the first place? Just why they’ve got so much debt? Perhaps question the advice you’ve been given them along the way. Why are your clients so unprepared, that they have to sell assets at a distressed time? Having a cash reserve, a buffer, a safety net, being in front of your mortgage repayments is Financial Planning 101. I suggest you get off your butt and start interviewing some advisers so they can be taught the basics.
Agree Anon. I helped someone this morning lodge their application for both Jobkeeper and super release – no fee. I gave a verbal warning. However, he hasn’t earned a cent for the last month and doesn’t know where the next bit of revenue (besides Jobkeeper) is coming from. he knows it will impact his retirement savings, but right now that is the least of his problems.
He would never be a paid client of mine, but I am glad I could help him in his time of need.
Thankyou, someone who actually understands how people are feeling at the moment and also understanding how our industry is actually regulated.
If you believe you can’t provide administration support then I’m sorry this industry has broken you… I also applaud you for not charging at all. No one should have to pay a cent to get this help as it is basic and doesn’t require any strategic or researched help. Provide your insurance cancellation, effect on super warnings and then HELP these people.
Govt to Reduce BS STRANGULATION of REGS.
Maybe a very slim chance when Pigs fly with COVID19.