Speaking to life insurer TAL, Financial Advice Association Australia (FAAA) CEO Sarah Abood explained the importance of growing the profession.
“I feel so strongly and passionately that we need more great advisers in this country. Our financial system can be complicated for people to navigate on their own, so having someone you can trust to be on your side is invaluable,” Ms Abood said.
“The power of connecting students with great future employers and career mentors should not be overlooked. By providing the right education and support to meet the regulatory requirements, we can encourage more new entrants into the industry which means more people will have access to the quality advice they want and need.
“It is incredibly important for us all to work together to help grow the profession, and we at the FAAA want to do all we can to help support new entrants.”
According to Ms Abood, the growing need for advice, combined with the falling numbers of advisers and “escalating compliance burdens”, has highlighted the resilience of those that remain.
“With only 15,664 practising advisers remaining, the ultimate ambition is that resilience will not be required in the ordinary course of business! There are many signs that concerns around regulatory complexities have been heard by government and regulators, and tangible improvements are starting to be made,” she said.
“Looking at the latest research by the Governance Institute of Australia in its Ethics Index 2023, consumers’ perceptions of the ethics of advisers continue to improve. In the last year, the Ethics Index recorded advisers increased by six points from 16 in 2022, to 21 in 2023.
“The positive trend in public perception suggests the profession’s efforts to enhance transparency, accountability, and ethical standards are gaining traction.”
It is important to maintain this positive trajectory, Ms Abood said, to benefit both clients and the advice profession as a whole.
“Clients are always the guiding light for advisers,” she said.
“If the advice given to clients is in their best interests, then advisers can be confident they are doing the right thing, and the practice will continue to grow over time. This will undoubtedly fuel the unprecedented surge in the demand for advice.
“By doing so, advisers can position themselves to not only meet the current demands but also thrive in a dynamic and evolving financial landscape.”
Regulatory clarity and a chance to evolve
Ms Abood also stressed that while the financial advice profession has been hit with a range of headwinds and is undergoing continuing change, there is also a “unique opportunity for the industry to grow and evolve”.
“I am optimistic that 2024 will be the year we see more regulatory clarity and certainty about the provision of financial advice – from both advisers as well as the broader Australian community and those who can benefit from receiving advice,” she said.
“The reality is that the future will be shaped by the choices that advisers make and those who are seeking a career and joining the industry.”
She added that the FAAA expects the details of the Quality of Advice Review reforms to be worked out this year, following Financial Services Minister Stephen Jones announcing the full raft of proposed changes in December last year.
“Advisers who are across any industry changes and are focused on understanding how these can be embedded in their businesses for the benefit of their clients, achieving improvements in communications, service, and offerings, will only continue to thrive,” Ms Abood said.
“I am very excited to be part of this important profession at such an important turning point and am feeling very positive about the year to come.”
I’m flabbergasted. The once former AFA and FPA was a massive contributor to this very problem. They directly caused it.
So when poor legislation is introduced that does not benefit Australians or Advisers you remain quite, you look at the opportunity for the FPA and think we can make some money out of it, and so you have this “let’s do nothing, let’s NOT over react” approach and 5 years later you hope we’ve forgotten about it and you put out some press release like this.
At the moment the ATO from 1 July 2024 is going to push up the cost of advice due to GST input tax credits being removed and again the FAAA is again quite as a mouse, and five years on you’ll put something will we?