A recent ifa reader poll surveyed almost 500 advisers and found that 60.3 per cent of respondents said they were considering retiring in 2020, while 39.7 per cent said they would remain in the sector.
The figures echo anecdotal evidence reported to ifa by major dealer groups in recent months, with privately owned advice groups Synchron and Lifespan Financial Planning both reporting significant losses to their adviser footprints in 2019 and predicting a further exodus this year.
Speaking at a media event in Sydney in February, Synchron director Don Trapnell said the group had seen about 10 per cent of its advisers leave the industry in 2019, and expected closer to 20 per cent of its remaining adviser force to leave in 2020.
“Our state managers have a strong emphasis on recruiting so we had a net 30 [adviser] increase [in 2019], but when you add that to the 50 that have gone out, we had to put on 80 people to get to that number,” Mr Trapnell said.
“I would suggest the next 12 months is going to be harder – if you asked me whether a 20 per cent loss is reasonable, I think that’s probably very close to the number of advisers leaving.”
Lifespan chief executive Eugene Ardino also told ifa earlier this month that the dealer group had seen 34 advisers leave in 2019, and said he expected to see the industry halve in size by the time the FASEA regime came fully into force.
“Five thousand advisers left the industry last year and that trend is going to continue into the first FASEA deadline in almost two years, meaning a lot of smaller fee-paying clients are going to become orphaned,” Mr Ardino said.
However, Synchron director John Prossor said the extension of the FASEA exam and education deadline to 1 January 2022, which is still awaiting passage through Parliament after being delayed due to the COVID-19 crisis, could buy those considering retiring from the industry some time.
“I think the 12-month extension for the FASEA exam might make it a little less [advisers leaving], but it will only postpone the inevitable,” Mr Prossor said.
Mr Ardino said he hoped to see the FASEA deadline possibly extended further in the wake of the COVID-19 crisis, given the importance of all advisers being able to help their clients through the worst stock market fall since the Great Depression.
“Advisers need to be focusing on the market fallout of this with their clients rather than implementing regulatory change – that can probably wait another year or two, so I hope the government looks at that,” he said.
“There may be no choice but to extend the FASEA deadlines because if people can’t congregate to do an exam, I don’t know how that can play out.”
This is just stage one of a stock market crash, stage four is when just one of your clients come back and take you to the “free” ombudsman for not meeting the best interest obligations…because they lost $5,000. I can totally understand why after considering the amount of legislation, regulation, red tape and now the plummet of 2020 will be the end of many. Personally I passed the exam and meet all the FASEA requirements already. I will be there for my clients for this year and next but have made the decision to exit. It’s impossible to help people now that need it the most and also run a compliant business. I got into this business because I wanted to help people, but I can’t do that now and all I do is pay levies and shuffle papers and apologize for my peers. I think I’ll just set up my own association and provide cup cakes in my retirement destination of choice.
Well said. Could have been me saying everything you just did (except passing the exam part, which I refuse to do) I’m here for my clients until Dec 2021 then I’m on the beach. For good. The frauds running this industry currently should be had up on charges for what they are causing clients and advisers. ‘We The people’ are powerless, it seems, against clueless self absorbed politicians, industry managers (I won’t call them ‘leaders’) and dangerous special interest groups with loud voices and undue influence. profoundly sad outcome for our once great industry and it is all caused by the ‘identities’ touted in this and other industry pages as those “doing something”. Not all of course but most.
I’ve never encountered such an over regulated and bureaucratic industry as this one is now. I’m seeing what most would consider good Advisers tear their hair out trying to navigate just the simplist activities for clients – its like swimming in quick sand. That has nothing to do with exams or education it’s all to do with an overzealous and complex regulatory regime that makes giving and recording/documenting advice too complex and costly. Geez I just tried to get an agreed value contract on my IP sorted out and the adviser wanted to charge me $2000! but the sad thing is I understood they needed to charge that to cover all the compliance they then needed to do…this is the biggest issue imo. Sure lots of Advisers will not want to do the exam or the study but they were the ones heading into retirement anyway…its the mess that’s been left for the younger ones that were planning on another 10 + years that have now got to battle through this farce
I’ve decided to leave the industry and run for parliament. Then, I’ll get myself elected for at least two terms, so that I can get a parliamentary pension for which I need to do nothing. Wish me luck!
Can you pull ASIC in line while you’re at it?
Maybe politicians should send people in their electorate annual opt-ins to keep their pensions going?
Wait for me…………………………….
That super scheme closed in 2004.
As a good adviser No Shame would have known that….
From my calculations your respondents (readers) only equate to 2% – if that – of total advisers. As a publication for advisers, shouldn’t you be trying to build the sector up rather than reporting such overblown and misleading doom and gloom?
That poll was a sample of 500 random respondents which, using the 80/20 rule, when applied across the industry would still average out to being mostly correct unless all the respondents were cherry picked in the 55+ age group.
For those that thought it was a good idea to stick their heads in the sand and hope that with enough whining the exam might go away or be delayed; behold the disaster of your procrastination. Should have put the yards in. But of course, I am many other advisers would not have had to do quite the yards we have if the majority had not been so complacent. Harden the FU! I for one am going no-where. I will be staring down the corona virus economic outcome and supporting my clients. I will not cut and run, I will be staying to carry on the fight come hell or high water.
I like your vigor and courage to continue the fight but sadly you will be buried in paper, red tape and waves of ongoing compliance that will end up making the juice not worth the squeeze – think of annual opt-ins, banning of commissions, post-graduate degrees, removal of fees from super, limits and caps on adviser fees in general, BID, more ASIC Industry Levy’s, 1,000-page SoA’s to recommend a 2 page strategy and a government that hates IFA’s and favours ISN’s – you really don’t stand a chance and it will end up being death by a thousand cuts. Jump ship whilst you can still save yourself.
I have just gone through the ASIC complaints process. I provided income protection to a client in 2010 and they filed a compliant in 2019 about how they were not paid out on their income protection. They were declined the claim because they did not disclose to the TELE underwriter about their existing health issue in 2010. The rough thing was, I was called to explain and had to contact the insurance provider, get 2010 file notes, SOA and get the TELE underwriter script. To make matter worse, I am working for a different licence. The point is, I had to prove that I had not misled the client in 2010 and my saving grace, if I use tele underwriting. It was hell for 9 weeks and my boss was like dude, you need to clear your name and avoid an ASIC entry because the business this and that usual BS.
We here at the Australian Story Integrity Commission believe take the opinion that this story is literally aids. 300 IFAs does not equal half the advice industry, lmao.
For those that are staying now is the opportunity to step up and make a professional name for yourself.
If this is fact or merely fiction, the simple truth is that the incompetence of FASEA, Regulators, falling markets, economic turmoil and to see a government scrambling to unscramble a broken egg is to late. Advisers aside for the moment, the government has simply failed us on a grand scale. Like the health system, no body could have seen the scale of this disaster. But this is what government should do. The only way you truly know if a system will work is to stress test this. The IT industry in software development do this all the time, protecting against hackers. Like wise with the financial system. This to ought be stress tested. Instead we have had theory driven people from the academic and legal world tell us that with a myriad of rules, we as advisers and the should should navigate. The enablers such as associations to have been compromised not with the consumers good in mind, simply self interest. This virus has now exposed much. We need to get rid of those people that got us to this mess. Not reward them for their short sighted incompetence. This though takes leadership. Which we have. These are the countless valued experienced advisers. Not the incompetent rabble we as an industry have had to contend with thus far.
If you could use correct grammar, I might take you seriously.
This is a self-selected group of respondents. Those numbers couldn’t possibly be representative of all advisers.
Why not?
Oh, we will be doing the exam tomorrow…via Procturing…which also means opening our entire computer systems, bringing down firewalls, etc. so some foreign American entity can make sure we aren’t cheating. Talk about exposing private information of everything in our networks. Thanks FASEA – another of your great ideas that could go horribly wrong.
What about laptops and hotspotting?
Buy a cheap laptop for $500 FFS. Seriously, if you are so stupid to do what you describe above, you shouldn’t be trusted with confidential client information.
where would said lap top be available from? as far as I know they are rarer than 40 packs of toilet paper !
Lol. Spot on. All the laptops are made in the Middle Kingdom!
I consider it every day at the moment……. Be interested in the date of the survey/stats, pre the quickest bear market in history? Cheers and keep well.
Couldn’t agree more especially when dealer groups are p%^$ks and provide zero support in this environment and just want to focus on their draconian compliance agendas
Who, in their right mind would enter this industry as an adviser ? If they did, they clearly have no concept of risk and return !
I would too if i saw the gravy train coming to an end and knew i’d actually have to do the hard yards going forward.
Maybe go and sell some used cars??
Or work for an Industry Fund and get paid out of Intra Fund Advice fees – these fees are reliable, ongoing, and have no requirement to service the client. Plus, it is an easy way to sell product ops, help people make contributions to my employers product.
Or get a job working for the government implementing stupid and ill thought out policies to try and score political points at the expense of entire industries.
Assuming their liquidity issues don’t cause a problem with those payments going forward. Seems like the industry fund Ponzi scheme is about to be exposed.
you are pathetic..