An associate professor of financial planning reckons between 21 and 34 per cent of advisers will leave the industry due to state-mandated education requirements.
Responding to research house CoreData's adviser retirement projections, associate professor Adrian Raftery of Deakin University took to LinkedIn to argue that a significant portion of the industry will likely exit rather than up-skill.
“Of course they are leaving the industry,” the academic said.
“Every conference I go to they say ‘my retirement date is 32 Dec 2023’. The thing I disagree with [is the estimate that] 16 per cent [will leave], as my estimates have it closer to 21-34 per cent.”
The comments follow CoreData’s research that indicated 16.5 per cent of respondents to its survey would rather change careers than comply with the new minimum standards.
The majority of respondents (68.1 per cent) said they intend to meet the requirements, while 15.4 per cent said they are “still unsure what is required … to meet the new requirements”.
CoreData customer experience and offer manager Sean Allen, a former manager with NAB- and Westpac-aligned dealer groups, said the exit of such a large number of advisers would have flow-on effects for investors and the broader financial services industry.
“Have we considered the implications for the consumer who overcame their own weight in apathy and actually took the plunge and engaged the services of a financial planner?” Mr Allen asked.
“Will they become the fodder of an 'orphan list' packed into the bottom of a brown cardboard box locked away in some far away storage document stronghold as licensees struggle to deal with abandoned businesses?
“What then are the possible implications for the many 'product manufacturers? Will they see the 'best advice' ruler being run over their old, ageing, costly and out of date (but very profitable) legacy policies? Will they now need to re-consider the hot potato of automatically upgrading customers and engaging them with meaningful advice?”
Mr Allen also said advisers looking to get out of the industry need to ensure they have an exit plan and to start preparing now.
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