Speaking at the Adviser Innovation Summit 2021, Phil Pilgrim – general manager of partnerships and distribution at Implemented Portfolios – said time is one of the biggest issues in the sector and that “advisers have never been so time-poor”.
Mr Pilgrim cited the Australian Financial Advisers Wellbeing Report released back in May, which revealed that 82.5 per cent of advisers said they have no time or energy, while 81 per cent said they needed more hours in the day.
“The process of providing advice is getting more and more onerous,” Mr Pilgrim said.
“We’re time-poor, we’re stressed, we need more hours in the day and we aren’t spending enough quality time with clients.”
Mr Pilgrim said if any business is going to be successful they must understand customer values and home in on that, however that is an area advice is yet to home in on.
“The problem we’ve got in advice at the moment is we’re still wrestling with where we add value and as a consequence many advisers are trying to do it all,” he said.
“When you overlay the increasing compliance burden and the effect it has on time it takes to deliver advice today, advisers are faced with a massive challenge.
“Pretty much, you either need to make a tough decision about what you’re going to spend your time doing as an adviser and what you’re going to outsource. Or otherwise, you’re going to have to drastically limit the amount of clients you can truly help.”
Speaking to ifa last week, adviser and founder of Australian service On Your Own Two Feet, Helen Baker, said the “over-regulation” of the advice sector is impacting financial planners’ mental health and driving them out of the industry.
“Over-regulation is putting an enormous amount of pressure on advisers’ mental health issues, the single adviser operation is being forced to merge, and many are leaving the industry due to the financial pressures, study pressures and increased CPD demands,” Ms Baker said.
“The increased regulation means advisers have less time in front of clients, plus increased costs to the practice including the need for more back-office support.”
the fund managers and SMA managers cause issues and problems for advisers too…!!
The Coalition is doing Labor’s job and is wiping out financial advisers. The current regulation is duplication over duplication if there is such a thing. No client will want to pay for this waste of time. So the adviser leaves or the business goes broke and there are no more financial advisers left. Exactly what Labor wanted!
Some clients will pay but I have an issue charging 3 times what I should be charging on the basis that the regulation takes that much longer to satisfy. It will be ok when there are 10 advisers left
Don’t feel guilty about charging more for your services. It costs what it costs to deliver the service and is exactly what Hayne and the regulators wanted. You never see surgeons feeling guilty or reducing their fees for their services. That’s because their patients have no choice but to either pay what it costs or wait in the public hospital queue for years or simply go without the surgery or whatever. Next Please !
Rob, I agree advisers should charge what they are worth and feel confident in it. I also understand your ‘doctor’ analogy’ however I disagree. Clients in our industry will ‘self-medicate’ and attempt to do their own money management online if investment advice fees are ridiculously high – they’ll walk away and adopt a DIY attitude. A person needing a heart or cancer operation does not have that luxury or facility and will pay what they have to for their life. I’m a risk adviser and my domain is the extreme example of this – clients simply will NOT pay for stand-alone risk advice even when comms dialed down to zero. They will, very sadly, get it done online. Investment advisers have started now to see this in their domain – will only get worse for everybody from here onward, honestly pains me to say.
Except when one requires surgery they (the client) won’t be tempted to do a DIY, or have the local Butcher slice them open, or listen to Dave down the pub explain the intricacies of a coronary bypass. This government has left the financial advice industry in that very predicament with too much regulation and a high cost to serve meaning a lot of people find their way into more scams and poor or unsuitable investments.
Managed accounts are not the solution to bad regulation.
Outsourcing is not the solution to bad regulation.
“RegTech” is not the solution to bad regulation.
“Robo Advice” is not the solution to bad regulation.
The only solution to bad regulation is better regulation.
…and be selective, don’t try to be all things to all clients, just ‘play in your space’.
And so it starts again. Its NOT bad regulation, it regulation we needed to make this a real trusted and growing industry. Every industry is benefitting from new tech and the planning industry and the planners have to get on board if they are to survive and grow.
We currently have a good choice of providers of quality technical solutions that will save time, improve compliance and improve the client experience. Sure the “one person bands” and this who can’t accept inevitable change will be finding it hard but the solutions are there for them – leave the industry, merge / sell with a future focused business, set to such a business and arrange a staged exit.
It is bad regulation. I have gone through lots of “technical solutions” and to be honest few of them do enough to justify their cost. If you can explain how adding TMD on top of BID improves advice I’d be prepared to listen but otherwise I’ll stand by my view it is bad regulation.
LIF was the classic example – reduce upfront commissions and make advice easier to provide was what was promised, the actual result was reduced upfront commission and 3 times more compliance workload.
You missed the biggest fall out of LIF reforms, premiums increased by 300% + under-insurance more than doubled + quality of cover on Income Protection policies reduced to Indemnity Only + no more guarantee renewable + Insurers started to IMPLODE and sell out leaving only a handful left who now control the whole market and will do whatever they want with premiums. What a big win for the consumer that is! It would be fair to say that reducing upfront commissions WAS NOT in the best interests of the consumer, to say the least.
Seriously, you are going to comment and say the regulation is not bad? What “quality technical solutions” are you referring to because they are all pretty bad in their own way.
Yes. And no they are not “pretty bad”.
So you believe that the industry needed an 8-page FDS and renewal letter then another renewal letter specifically issued by the fund manager plus each fund manager’s renewal letter must also be completed and signed in a specific format and uploaded through their individual portal then the same fund manager needs the client to click on another “advise renewal” button in their dash board and this process should be done for all 200 clients spread across 7 different fund managers and done annually which works out to over 1,800 pages per year, and somehow that is efficient and much needed regulation?
I would be happy to apply for a role at ASIC so they could have an Adviser working in the organisation so they could have input from someone who has been at the coalface.
ASIC think they have this already. But what they really have are a bunch of failed financial planners and financial planner wannabes (ie.paraplanners and compliance staff who couldn’t get a client facing role because their managers could spot the problem from a mile off) These types didn’t have the emotional intelligence to make it as an adviser. They have giant chips on their shoulder and now they take out their frustration on the rest of us. This is why the only path forward is to have a panel of experienced, practicing financial planners running our profession. I can’t see it happening any time soon, but until/unless this happens, the numbers of financial advisers will continue to head towards ZERO until every last one of us is gone.