A story exposing the impact that radical industry reforms are having on individual advisers has prompted strong reactions from the IFA community.
Suicide is a very difficult subject to write about in a news story. There’s a high risk that your words will be taken the wrong way, a cheap headline capitlising on tragedy. I can assure you that there was no self-interest in the story we ran last week informing the industry that 16 advisers had taken their lives this year.
As a journalist covering the wealth management industry, I have come to witness the impact that overbearing government reforms and an ‘out to get you’ regulator can have on the individuals that make up the profession.
Having taken up the reins as the editor of ifa and Investor Daily in August last year, I had no strong beleifs or opinions about the financial advice community. I simply reported what I saw and heard.
However, during the royal commission hearings it became clear that the environment had turned ugly. Any thought that radical changes and mud slinging would impact the lives of financial services professionals was quickly forgotten in the avalanche of negative press hell bent on bringing down the industry.
When I met former Dover Financial boss Terry McMaster in September last year, my mindset shifted. I saw a man under extreme stress, overpowered by a system that had forced him to surrender his company, visibly shaken by the experience, and physically and mentally exhausted. He looked liked he’d been chewed up and spat out by the machine. I immediately presumed he must have committed some terrible crime to deserve such anguish.
But I was wrong. He hadn’t stolen his clients’ money, operated some Ponzi scheme or managed a business that put Australians into dire straits financially. He lost his business because ASIC didn’t think his client protection policy was up to scratch. In my mind, the punishment didn’t fit the crime.
Which is exactly the point that needs to be made to the Australian public. While some advisers are clearly doing the wrong thing and need to be removed from the industry, the vast majority are helping their clients live better lives.
Banning grandfathered commissions, stripping mature advisers of their retirement, reducing the value of their businesses and making a mockery of their life’s work by enforcing ridiculous education requirements is an extreme reaction from the government. The compounding effect of these pressures has simply been too much for some advisers.
The mental health impact needs to be taken seriously by industry associations, institutions and the government. You can’t keep piling on these additional requirements and somehow expect people not to crack. Advisers are already buckling under the pressure of this red tape regime and nobody seems to care.
It’s time for Australia to realise that human lives are at stake.
James Mitchell is the editor of ifa.
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