ClearView released a white paper, ‘What’s old is new again’, that noted mature advisers in their 50s and early 60s could retire prematurely from the financial services industry due to broad structural and regulatory changes, despite their desire, ability and capacity to continue providing advice.
ClearView general manager of distribution Christopher Blaxland-Walker said the convergence of four major factors: demographic changes, digital disruption, remuneration reform under LIF and stricter education and training requirements, threatened to extinguish an entire generation of invaluable knowledge and experience.
“Moving into 2017 and beyond, it’s important that there isn’t a repeat of 2004 when the introduction of the Financial Services Reform Act (FSRA) drove out many advisers, both good and bad,” he said.
“FSRA got rid of many unqualified and poorly qualified agents, and rightly so, but in the confusion many competent mature advisers exited too.
“They weren’t adequately supported to gain the necessary qualifications, adjust their business models and manage the transition.”
The white paper proposed possible solutions including formal and informal mentoring programs that marry experienced advisers and newcomers, and the creation of flexible ‘relationship manager’ roles within manufacturers, licensees and practices, designed specifically for senior advisers and former advisers.
Further, it said that these full-time, part-time and casual roles would likely include client-facing responsibilities such as welcoming new and prospective clients, connecting them to an advice, articulating the value of advice and handling claims.
“The current generation of advisers are more educated and technically proficient than any other but they can still learn skills and qualities like empathy and resilience from mature advisers,” Mr Blaxland-Walker said.
“If the industry can successfully close the generation knowledge gap, the result will be a profession that’s mastered the art of winning new clients and building personal relationships not only business relationships.”
I suspect a lot in this category would be self employed and not attached to FSC licensees and who are capable of choosing which providers they use rather than a select few. Not what vertically integrated dealers (read FSC) want anyway as they create competition. I may also be wrong, either way the article is correct with potential lost experience.
Stating the obvious! Of course there will be an exit of risk advisers. 60% commission with a 2 year clawback does not cover costs and most clients will not pay fees for risk advice. So obviously new advisers will not want to specialise in risk. Existing risk advisers will leave or do something else unless they have a book large enough to keep them afloat.
That leaves existing risk advisers in their late 50’s and 60’s who probably are the only ones who do have a book large enough to sustain them.
But why would they want to write new business for no profit? Why would they want to complete additional qualifications to write new business for no profit? They are better off sitting on their books for the next 6/7 years and then retiring.
This isn’t rocket science, its just about being able to make a living and the LIF is designed only to profit the insurance companies and their salaried aligned advisers.