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FOFA forcing adviser 'brain drain'

The Future of Financial Advice reforms will see more financial planners relocating overseas in search of less regulated markets, a Dubai-based adviser has predicted.

Having relocated to the United Arab Emirates eight years ago, Craig Holding, a financial adviser and chairman of the Australia Business Council Dubai, told ifa there are significant opportunities for Australian-qualified planners offshore.

“There is huge opportunity in the [independent financial adviser] market here as the expat population increases,” he says.

“There are more than 16,000 Australians living [in Dubai] and less than 10 Australian-qualified financial advisers.

“The main work opportunity for Australian advisers is helping Australians here with their superannuation from back home; familiarity with the Australian super system is sought after in the market here.”

The promise of offshore business opportunities may be particularly attractive to those advisers that are accustomed to a commissions-based remuneration model, said Holding - whose own company, Acuma, is an offshore advice firm that works on a 100 per cent-commission basis.

While there is a licensing system operating in the UAE – which is modelled closely on Australian and UK financial services laws – Holding says it “doesn’t go anywhere near as far as in Australia”.

Holding, who is a former Westpac adviser and first moved abroad in part due to fears about increasing regulation, says he thinks FOFA will inspire more advisers to look to global opportunities.

“Two things will happen after FOFA, both resulting in a massive ‘brain drain’,” he said.

“Some advisers will get out of the industry and move on and do something else – which is what I would do if I came back home because the regulatory environment is just not worth it –but others should think about moving offshore and moving to a less regulated growth market like Dubai.”