The 2018 Planner Business Model Report found that in the past 12 months the average financial adviser lost 35 active client relationships and gained only 20.
Fifty-three per cent of the 899 advisers surveyed for the report said the shrinking client base had taken its toll on their practice’s profitability growth.
However, the vast majority (69 per cent) of advisers are looking to actively grow their client book, according to Investment Trends research director Recep Peker.
“Despite challenging business conditions, the average planner intends to expand their client book, and support from their licensee, technology and service partners will be more critical than ever to alleviating their top challenges,” Mr Peker said.
On the topic of FASEA, two-thirds of advisers believe the education reforms will be a “positive structural transformation” for the industry.
Twenty-five per cent of advisers believe the professional standards and educational framework set out by FASEA will have a negative impact on the industry.
“The younger generation of planners are, in fact, more positive towards these FASEA led reforms,” said Mr Peker.
Finally, the move to self-licensing is continuing, with 20 per cent of advisers saying they have their own AFSL – twice as many as in 2012.
“While self-licensed planners brought in a higher level of new inflows over the last 12 months, fewer report annual practice profit growth compared to their colleagues in the wider planning market (47 per cent versus 54 per cent),” said Investment Trends.
“In addition, the vast majority (78 per cent) seek external assistance with a range of business support needs that they are willing to pay for, especially around SOA build, compliance and client engagement.”
Mr Peker added, “These unmet business support needs represent a significant opportunity for service providers to expand their proposition to support the growth of self-licensed planners.”
“The younger generation of planners are, in fact, more positive towards these FASEA led reforms,”
Maybe it’s because they are still naive enough to think it will benefit the industry?
Older advisers who have been around long enough to sit through the 1997 Wallis enquiry & CLERP reform, 2001 FSRA, the 2009 FoFA enquiry, 2012 Cooper review, 2013 PJC on Corporations & Financial Services and the 2015 Murray enquiry all know that more regulation doesn’t fix things. It makes life harder for the genuine advisers & easier for the crooks! After all that reform, what has gotten better for clients? Where is the industry wide analysis that shows more of the public are better outcomes?
What we know is advice keeps getting more expensive because of the extra regulations heaped upon older regulation. The public has been forgotten in the regulators attempt to shield them.
With the public having less access to quality advisers there will be a lot more people getting ripped off through unregulated advice.
As they should fall… Advisers with over 1,000 clients due to grandfathered remuneration aren’t servicing their clients. Its impossible.
“Two Thirds or advisers are positive about the FASEA proposals”? I can only assume that the Business Planner Report must have targeted a select group of advisers to get that result! I know many already highly qualified and successful advisers that don’t support that view. I would also question how you can support the proposals and the “positive structural changes” they believe will come from it, before the content of the exam is finalised or the bridging course requirements are determined?