This week I was informed by one industry leader that 16 financial advisers have taken their own lives so far this year. The pressure that advisers are under is real and the consequences can be devastating. Too often we forget that there are human beings with families that make up a profession like financial advice. While the government and regulators happily pursue a radical reform agenda, little thought is being given to the advisers who are being forced out of an industry they were part of building.
“Whilst the enormity of mental health consequences has rarely received a second thought by legislators as they vehemently imposed non-stop change on the advice sector since 2001 with the FSR Act, even less regard has been given to the impact on the partners and children of financial planners,” Property Funds Management Australia CEO Barry Daniels said.
“There are very few industries, if any, that can compare to the advice sector for the intensity of industry scrutiny, reform, change and compliance demands.”
The Melbourne-based planner believes FOFA, escalating education requirements and plummeting values of businesses after a lifetime of endeavour have been the final straw that has shattered the lives of dedicated practitioner, both mentally and financially.
“Like so many SMEs, most planners began their self-employed journey as a ‘start-up’ and after years of perseverance established successful commercial enterprises. They built an asset that would ultimately fund retirement by sale or BoLR arrangement as a benefit of long-term loyalty,” Mr Daniels said.
“In order to achieve this, the spouse was critical as sole parent, partner, ‘family rock’ and peacemaker as the planner husband or wife spent so many long hours servicing the complex financial advice needs of clients.
“In addition, the partners were often called on to act as the business receptionist, accountant, bookkeeper and general administrative support. This is often an immense role that is regrettably going unrecognised by legislators in their zeal to achieve industry reform.”
The government will today introduce legislation to outlaw grandfathered commissions, an important revenue stream that many financial advisers have relied on to support their business and continue to service clients.
In the June quarter alone, 1,750 advisers left the industry, leaving just 25,470 advisers across Australia. This equates to a 6.4 per cent decline in total adviser numbers for the quarter and is in line with the continuing fragmentation of the industry.
If this story has raised any emotional or psychological issues for you, you can utilise the below resources:
* Lifeline, 13 11 14, www.lifeline.org.au
* Suicide Call Back Service, 1300 659 467, www.suicidecallbackservice.org.au
* MensLine Australia, 1300 78 99 78, www.mensline.org.au
With so many suicides in Financial services, who is writing their story? The licensee just hands the clients to another adviser and they are forgotten! H
https://www.afr.com/companies/financial-services/post-hayne-chaos-may-yet-sink-financial-advice-industry-20200129-p53vrt
“It is this overt influence of the licensee, and its owner, that in Morris’ eyes (and those of many other experts) is at the root cause of misconduct uncovered by the inquiry.
“A large part of the problem was that dealer groups were really abusing their position of power,” he says. “The foot soldiers have been hammered at the royal commission, but many of them were just following orders from their dealer group.”… many in the industry have been discussing this very point! You get these senior managers who jump from one large Corp to another, bringing their mates with them. They control the APL, the education, training, software, compliance and adviser documents. They have large incentives to see FUM funnelled into their in house products/MDA/IMAP/ portfolio. The force advisers to drink the cool aid and those who don’t are ostracised
It’s a pity Jeff Morris didn’t make this point clearer in all his canoodling with Adele Ferguson. Ferguson has spearheaded a vicious vilification campaign designed to tar all advisers with the same brush as a minority of rogues. In doing so she has destroyed the lives of thousands of innocent people, and diverted media and regulator attention away from the real source of the problem.
From the Fin review about the royal commission “It is this overt influence of the licensee, and its owner, that in Morris’ eyes (and those of many other experts) is at the root cause of misconduct uncovered by the inquiry.
“A large part of the problem was that dealer groups were really abusing their position of power,” he says. “The foot soldiers have been hammered at the royal commission, but many of them were just following orders from their dealer group.”… one day lawyers will start hunting for the senior management if dealer groups who’s actions contributed to the deaths of advisers
My licensee pushed me to attempting suicide. I have battled on but their relentless harassment and corporate bullying has taken its toll
[quote=Angry at IFA for printing this]https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1124845/[/quote][quote=Angry at IFA for printing this]https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1124845/[/quote]
From your own article: The impact of the media on suicidal behaviour seems to be most likely when a method of suicide is specified—especially when presented in detail—when the story is reported or portrayed dramatically and prominently—for example with photographs of the deceased or large headlines—and when suicides of celebrities are reported.
What do you suggest? We bury this under the rug and not speak of it?!! THAT is exactly what our industry is battling with, we’re not speaking up like the Mortgage Brokers did – wake up and be sensible!! the general public need to hear about this!!! This is NOT ok to be happening!
[quote=Justice]We are up to 3 suicides in our company.[/quote][quote=Justice]We are up to 3 suicides in our company.[/quote] This is just terrible! I am so sorry for your losses – I hope their families/loved ones are getting appropriate support at this difficult time.
[quote=Kiril] Betrayal from our very own Association that was supposed to be looking after our interests. Give me a break. [/quote]
It may be your association but not mine. When I joined this industry I couldn’t see the benefit of joining any of them so didn’t. I don’t need to hide behind an association to register with the TPB – I went out and did the required study.
Also some of us don’t fear the removal of commissions because that is not how we get paid therefore why would I contribute?
It is sad though that some advisers have been put in such tight places where they felt this was the only way out.
Seriously this industry is in crisis.
And what are we doing about it?
The mortgage brokers all band together and fought the Hayne recommendation and the government backdown immediately.
And what have the FP community done?
We have just continued to take blow after blow.
Betrayal from our very own Association that was supposed to be looking after our interests. Give me a break.
And now we have a last ditch opportunity to fight back, a one off last chance and even now we can’t get enough advisers to contribute a measly $300 to a fund that will take this injustice to the High Court.
That fund has raised $1m when it was targeting $3m.
If we can’t help ourselves… then who are we thinking will help us?
Very sad that our colleagues have felt that desperate that they saw no other option but to take their own lives. Very very sad.
We are up to 3 suicides in our company.
For the families who have lost their loved ones by way of suicide, I would be pursuing legal action against the authorities including justice hayne.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1124845/
[quote=Werner Watzdorf CFP]If my calcs are correct that’s about 12 times the national average. I have yet to see a mainstream media article dealing with this[/quote]
Wikipedia rate of average suicide in Australia is 0.0057 out of 100 people in 2016. https://en.wikipedia.org/wiki/Suicide_in_Australia.
Financial adviser rate = 16 / 25,000 = 0.064 out of 100 advisers.
0.064 = 11 times X 0.0057.
So it is 11 times the average suicide rate.
Wikipedia rate of average suicide in Australia is 0.0057 out of 100 people in 2016. https://en.wikipedia.org/wiki/Suicide_in_Australia.
Financial adviser rate = 16 / 25,000 = 0.064 out of 100 advisers.
0.064 = 11 times X 0.0057.
So it is 11 times the average suicide rate.
The industry bodies and the licensees need to step up . Licensees can be too heavy handed when dealing with advisers who are suffering from stress and depression. They have a duty of care to their advisers . Most of the advisers are self employed and licensed by a dealer group run by salaried employees who have not put everything on the line for their business. If an adviser tells their licensee that they are struggling due to mental illness their licensee will hold back fee for service revenue and insurance commissions . They will argue this is due to the inability to service clients, leaving the adviser with no income and debts to pay. It wouldn’t take much for a grieving family to take a licensee to court based on duty of care
Many of the comments here are quite misguided. It’s not the politicians you should be blaming or the current industry bodies, it’s the industry leaders of days gone by. This industry has had decades to do something about becoming a profession rather than a salesforce and it has been dragged kicking and screaming to make changes… and continues to resist the changes necessary to win the respect of the public.
Under Shorten we were facing instant death of an industry. Under the Liberals (ironically), we are facing a slow painful death of an industry. Thanks Associations, I hope those online dating tools and fluffy conferences are working out..
Time to take our comments public (both mainstream media and the Government) and rattle the chains. Whilst platforms like IFA are good for us to all share our grievances, all we are doing here is preaching to the converted and not communicating the realities with those that can make change. If we can get traction and educate the public that we don’t all work for the banks and large instos and that the structure of the rapid reforms are creating a mental health crisis, the public will soon see that it is the Government that has blood on its hands and is our best hope for change and for things to be reviewed.
I am going to send this article to every Politician. They disgust me as to how badly they have treated professionals in this industry. They have blood on their hands and they should all be ashamed of themselves. Bullying and Harassment in the workplace (especially from Govt) should never be tolerated.
The Financial planing should be ashamed . When the mortgage industry was rocked last year with possible legislation changes , all brokers , aggregators , banks excluding CBA United via marketing on tv , radio ect . FPA and vertical integrated liscencee / product manufacturer have not spoken out of course not .
you have to admit, Brokers are a different industry and seen in a totally different light. No ‘scandals’ or bad rep to defend. different ball game.
The problem for me is that because I am part of a vertically integrated AFSL (Affinia) I don’t qualify to to be a member of the AOIFP. In spite of all my actions in my business life being of independent in thought and deed.
I don’t believe that all AFSL’s are created equal and the prime offenders in what the AIOFP were (IMHO) were trying to highlight were the Banks via their employed adviser network.
I receive no incentive to place business with TAL (in fact they were, until their acquisition of Asteron, one of our smallest books of business) I do however get their philosophy and wholeheartedly endorse it.
See Liberal Party Charter below, Does this published content by the Liberal Party fall under misleading and deceptive conduct? Clearly if you are an adviser you have no inalienable rights if there are votes to be won and headlines to grab. The expedience of a modern politician just makes me sick to my stomach. This government is currently in open contempt of their very own ideals, and its got to be hard to support a party that doesn’t even believe in itself! The industry, its advisers, employees and every stakeholder should be ditching the liberal party en masse, joining the FSU and informing your local MP if your intention to do so Union/industrial action may be the last way to get some common sense to prevail, AFA and FPA have proven to be a waste of time and money.
https://www.liberal.org.au/our-beliefs
“We believe:
– In the inalienable rights and freedoms of all peoples; and we work towards a lean government that minimises interference in our daily lives; and maximises individual and private sector initiative.
– In the innate worth of the individual, in the right to be independent, to own property and to achieve, and in the need to encourage initiative and personal responsibility.
– In government that nurtures and encourages its citizens through incentive, rather than putting limits on people through the punishing disincentives of burdensome taxes and the stifling structures of Labor’s corporate state and bureaucratic red tape.
– In Liberalism, with its emphasis on the individual and enterprise, as the political philosophy best able to meet the demands and challenges of the 21st century.”
It is ironic, the Liberal Party have created the most stifling, burdensome and punishing system of regulation this country has ever seen and here they are having the hypocrisy to criticise labor in their charter.
We can all get behind reform, professionalisation etc and improving this industry for consumers, we know this industry needs to improve and most are on board with the intent of the regulation and desperately want to see ethics improve. But the government is intent on utterly crushing people in the process and to hear this news of suicide is both galling and unsurprising. My heart goes out to any family impacted by this.
Where the hell is my earlier comment IFA????
I strongly suspect you’re censoring an enormous amount of responses to this article as its probably the single most damning article written in the last 5-6 years about the shape this industry now finds itself in.
What gives?????
And where is our beloved FPA?….fiddling around the edges and no guts to take on this and other critical issues.
It is clear the so called representative parties for financial planning are doing nothing about this. Its up to us to make the noise wether that be on these politicians social media or emails. Mental health in the work place is a hot topic and the fact that this is only being published on a financial planning site and not main stream media is scary.
Let’s not forget the plight of those who haven’t actually committed suicide, but have plunged into the depths of despair (depression) , lost their business, their marriage etc , all of those hopes and dreams shattered at the alter of ideology and reform for reform sake! Let us not miss the ‘000’s of advisers who will leave the industry well before their Best Before date, well short of fair value for their business sale in spite of years (decades) of diligent industry and hard work.
I guess the ultimate insult is the current plan to introduce legislation (today) in to parliament in direct conflict with constitutional law ! the Hubris of this government is staggeringly unbelievable .
this is a sad day for the rule of law . to paraphrase the Derryn Hinch “Shame , Shame, Shame”
I have been informing my local member in Goldstein of the devastating effects the reforms this industry has relentlessly undergone the last 4 to 5 years would have on the industry but I had no idea it had gotten this bad.
This is nothing short of an absolute tragedy. How this can be allowed to happen?
If Kenneth Payne, the Regulators, past and current Government MP’s that have decimated this industry with their fool hardy uninformed legislation, life insurance companies and that disgraceful conflicted organisation FASEA aren’t taking note of this now, then let every one of them be damned to hell!!
They are no better than the tiny, minute number of advisers out there that may have crossed the line of unethical behaviour.
I’m so sick to my stomach after reading this article.
It is heartbreaking to hear that this number of planners felt that their only option was to take their own lives. My deepest sympathies go out to all of their families and loved ones. When is this ongoing attack going to stop, how many more lives have to be lost.
Why is bullying in the workplace illegal but bullying by the governement, regulator, industry associations, political parties and all those with their own vested interests deemed to be acceptable???
We do so much good for our clients and the community and this is how we are treated.
To all those financial planners out there, please take care of yourselves and talk to someone.
The mortgage broking industry united on the trailing commission and were victorious in arguing for small business survival. On the other hand the financial planning industry have completely shot themselves in the foot due to the divisions caused by some desperately trying to do away with commissions in order to be seen as professional whereas others acknowledge that trailing commission is a critical income to support a business to service clients. What the former have missed is that the key drivers behind the removal of commissions is the drive to eliminate adviser costs because they see no value in advice. Next will be a push to stop advice fees coming out of super and then after that a push to limit the amount of advice fees. Small business is being pushed around by salaried bureaucrats that do not understand the economics of the self employed. The disruption caused by a lower cost is better philosophy is destroying jobs and service levels are suffering. The irony is that this trend will push power into the hands of fewer players who will then exploit the market via market domination. That is their business model for those of you who are yet to wake up to this fact. Where will future jobs come from is the question we should all be asking as there are only so many fat cat jobs on offer.
A very sad and concerning but completely true situation. Advisers need to become better of taking this public, as its clear that our industry bodies are trying to stay below the radar. Unfortunately, mainstream media and many journalists believe that advisers all are aligned to the banks and large institutions and are somehow sheltered and immune from the mental and financial toll constant reform is taking on advisers of all standings. Until we get better at communicating with and educating the media and in turn the Governement that the majority of financial planners work in small businesses with generally less than 10 employees on average, public opinion will not change. The mental toll and loss of life is completely unacceptable no matter which side of the debate you sit on. Take the message public, both media and to your local MP, otherwise things will only spiral to crisis point
These self-interested greedy thieving politicians and special interest group. Scott Morrison, Frydenberg et al. Now they have[b] significant blood on their hands[/b][b][/b] I wonder if they will even stop to think about it. As someone here has said these [b]ridiculous and ill-conceived reforms[/b][b][/b][i][/i][i][/i] are helping NOBODY, not least the clients in ANY way, except the politicians and big end of town with no commissions to pay but they’ll keep their slice same as now. [b]With blood on their hands[/b][b][/b] and no signs they’re not looking for more blood and lives to ruin through their self interest and greed. They were warned this would happen. [b]This is beyond an outrage[/b][b][/b] and I hope in some way they are each personally held accountable – through legal means or otherwise!
Just hang your heads in shame Australia. Just makes me angry. How the hell did we end up like this? Is this Australia?
How did we let it get to this point. I was on the verge of doing something silly myself a few months ago and fully understand how easy it is to get into that state of mind. We are being pushed into a corner. Thankfully , i came to my senses and have decided to retire after 30 years of building up a worthless business but still better than the alternative. I hope that its not too late for the legislators and regulators to come to their senses and work together with us for a better solution for all.
How can this happen. I am so saddened. As someone who has been in a dark hole over the last 12 months and come out feeling so much stronger this type of stuff needs to be addressed. I don’t think the majority of advisers are asking for much. We accept change. We accept banning of commissions. We want better education standards. We just want the next steps to be reviewed, planned, and processed with logic and not terribly rushed like they have been. Our industry is coming to a fork in the road. Fellow advisers, you have my support.
How about we get a royal commission into the treatment of advisers by faceless & heartless ASIC and associated regulators?
While incredibly sad, this is not surprising. What is expected when hard working small business proprietors are basically losing the value of a lifetime’s work due to MySuper, FOFA, and LIF regulations, the Royal Commission, overzealous fund managers who are happy to cease paying grandfathered commissions and writing to clients suggesting that they turn those ongoing commission payments off, business valuations as a multiple reducing due the above, together with our ability of earning an income in the future being severely compromised thanks to FASEA.
This is of course coupled with the outrageous and onerous compliance responsibilities for something as simple as a new Term Life insurance policy.
Speaking from person experience this simply means that my current lifestyle is effected significantly, myself and my wife will have to continue to work full time for the foreseeable future (at a time when we should be winding down), and my plans for a moderately comfortable retirement have completely disappeared. Having said that, it doesn’t matter because we are only AFSL Authorised Reps and all criminals because we dared take commission at a time when fund managers determined that it was most cost effective means of distributing their products.
Great article…I would love to see a piece like this picked up by the broader media so that someone other than us reads it. I’ve been saying for some time that the only way anyone will sit up and take notice is when the grieving spouses and children start knocking on the doors of their local MP to show them the lives and families they’ve been destroying.
19 times than the rate of the general population. Will anyone do anything about it?
Our role is literally helping people with one of their most important facets of life. Yet what industry is more relentlessly persecuted?
Shocking… this needs to immediately be addressed. FASEA needs a time line review. What the hell is going on? As a new financial planner (nearly compliant) I’m going to sell the small book of clients that i have built. Over it.
If my calcs are correct that’s about 12 times the national average. I have yet to see a mainstream media article dealing with this
100% of the media coverage and political discussion is about poor advice, bad financial advisers, ASIC not tough enough etc. etc.
We all know the majority of advisers provide sound and ethical advice, but we never hear about this through mainstream media.
The relentless drive for more and more and more compliance, ASIC punishing advisers over sometimes very minor indiscretions/errors, and Hayne’s attempt to shutdown every revenue stream other than one-off fee for service charges is just so overwhelming and causing damage to individuals, businesses and families.
We desperately need a real push-back on some of these issues, and we need some politicians on our side to speak up.
James, it is about time that the struggle that a lot of advisers are facing was highlighted in the media, especially just how far we have been pushed since the RC. There has been so much blame levelled at financial planners by Government, regulators, industry bodies, product providers and consumers, all because of a lack of understanding and media coverage that has pointed the finger in the wrong direction. Yes, there has been a small number of planners do the wrong thing, but not to the degree that has been portrayed in mainstream media. There seems to be no accountability from the regulators’s lack of action, product providers choosing profit over consumer outcomes, industry bodies with all of their vested interests and the mainstream media looking for a headline. We are the ones that sit in front of clients at the best, and worst of times and continue to do our best to serve our clients in the best way possible, all the time being blamed for the sins of everyone else in the industry just because we are at the bottom of the regulatory ladder and an easy target for the regulator.
Throughout the process of the RC and since, we have had little representation from our governing bodies, little, to no, consultation from Government and bashed around the head constantly with regulations that add to the cost of us providing a service. We have had no clear direction from anyone that provides us with some way of preparing for the future with confidence. FOFA, LIF, FASEA, PYS are all changes that we have had to adapt to, but none of these have taken into account the diversity of the industry which has allowed the term “unintended consequences” to run rampant. I still have groups of clients that are suffering from FOFA and there is nothing that we can do to change that.
I can only speak for myself, but as a planner, all i want is a fair go. Lay blame correctly, regulate accordingly, remediate as necessary and use some [u]common sense[/u][u][/u] that is in the [b]best interests of the consumer[/b][b][/b], not the vested interest of the people pushing their own agenda.
I have been saying this for a long time now, that it is a matter of time before advisers simply start taking their own lives. When collective punishment is imposed on people, who may feel totally underserving for the actions of others and then forced to watch an entire lifetime of effort, sacrifice and risk go up in flames, it is not hard to see how their despair could lead to this. Obviously taking ones own life is never the answer, but one can see how the conditions have been made ripe for this by the government. Just feeling incredibly sad about reading this, suicide is a shocking problem in the country and to have the government fan the flames is a tragedy. How can people feeling the need to take their own lives due to their own governments actions be charachterised as anything other than state oppression?
I wonder if Jane Hume, the regulators and the associations who have been asleep at the wheel protecting their members interests have read this. Where is Jane Hume by the way? Too busy working on blockchain and self promoting herself on social media…….Hello Jane……. where are you? Can we bring some common sense to the insult of all this legislation placed on ethical hard working planners that was caused by bank models not by the majority of decent planners??????? Banks have got off Scott free
Josh, ScoMo, Jimmy S, K Hayne….hang your heads in shame
Thank you so much for discussing this important issue. For so many, the struggle is too real, and it’s heart breaking to hear so many advisers end up believing that suicide is the answer. This in turn leaves their families, clients and friends at an even greater loss. I’m sure the regulators are still sadly disinterested in the human toll the changes are creating.
Who was the industry leader James? It’s hard to understand why they would need anonymity. for such an important issue. Surely this deserves far more than just a flippant “one industry leader”. For any journalist surely this is real news.?
Raising education standards and getting rid of conflicted remuneration are very worthy policies.
However, the complete joke of the process of FARSEA over the last 2.5 years is nothing short of an Ethical disaster.
And regardless of Economic degrees, DFPs, SMSF specialist, Estate planning specialist, AFSL Responsible Manager 15yrs, 20 years Advice experience and CPD, apparently I have NO Ethics. Being told by politicians to do another Ethics course is the height hypocrisy.
As for a complete disregard of contract and constitutional law in wanting to steal Advisers grandfather revenue. See you in court.
Seriously these politicians and government bodies have their heads stuck so far up their Canberra bubble butts they just don’t have any idea of practical real world implementation.
As a fellow financial planner, this saddens me. #governmentwithoutasoul
As a Financial Planner I concur with the sentiment of this article. The punishing regime of legislators without regard to the human factor equates with the tactics of the French Revolution and its henchmen and women. I am so sorry for those families that have suffered the loss of their Planner Partner. It would be interesting to find out if those suicide cases were part of the Planner cohort that left the industry.
My thoughts are with those broken families and will pray for you.
Thanks James for bringing this tragedy to my attention. This is very sad news for the people involved and their families. So unncessary and decisions being made with a stroke of a pen rather than looking at the human element.
The impact that is being felt across the board is so devastating. We have stuck through all the changes and legislation reforms that have been dictated to us by higher ups that do not understand how a small Financial Planning business works. They assume that we are all bank or product salary Financial Planners that have the capacity to adjust to the huge changes including financial impacts of this last round of legislation. I have been in the industry for 20 years and have always focused on the help that we provide to our clients. Unfortunately I can see that we will be forced out – there is just too much personal risk involved, in order to continue to service clients we need to charge higher fees which means that we have to let go loyal clients because they cannot afford the new cost. No one is benefiting from the reforms, certainly not the end client or the families of financial planners.
Greatest thieves in the world are politicians and they continue to destroy this industry