The structure of the financial planning sector and the industry’s trouble with corporate concentration is deterring potential planners from entering the sector and making it difficult to become self-employed, a consultant has said.
In a statement yesterday, Connect Financial Service Brokers chief executive Paul Tynan said the present structure of the financial planning industry is “quite literally deterring potential planners from entering, as those would be self-employed practitioners and business owners struggle to find that small book of clients needed to start a commercial enterprise and advice focused career”.
Mr Tynan said the scarcity of small books of clients in the marketplace is “another consequence of the industry’s concentration - with the majority of licence ownership in the hands of six corporate entities”.
“A further outcome of concentration is the industry’s buyer of last resort (BOLR) arrangements that has further incensed many and contributed to the lack of books on the open market,” he said.
Mr Tynan said along with the sector’s concentration problem, ongoing debate over academic qualifications, professional development standards and product structural issues are also acting as a disincentive to prospective entrants.
“The professional member associations representing the accounting and financial planning sectors... have found themselves needing to focus on lobbying the government whilst simultaneously trying to remain relevant to the changing needs of their members with education standards, conferences, roadshows and workshops,” he said.
“To remain relevant in the future, professional associations will need to be far more proactive with significant investment of resources needed attract new industry entrants with business owner mindsets and supporting their mature age members to successfully exit the workforce into a financially secure retirement.”
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