Speaking on the latest episode of the ifa podcast, Marc Hraiki, executive director of adviser sales and services at Lonsec, said that he is “bullish” on both the current state of advice and the future of the profession.
“In general, life is complex. Individuals, Australians, have complex financial needs. In concert with that, we have an ageing population who have complex environments and complex needs to meet,” Mr Hraiki said.
“You couple that with the fact that we’ve got a reducing adviser base or reducing number of advisers and it creates a perfect storm of demand and supply. So, for really strong advice businesses, the opportunity is enormous. I think it’s a great time to be in the space, and for anyone considering the space, a great time to consider it.”
While Mr Hraiki has a positive outlook on the advice landscape, he isn’t pretending there are no challenges for advisers, including the tough market dynamics currently at play.
“Since the onset of COVID, we’ve had three years of volatile markets. We’ve seen interest rates increase, seemingly an endless spike of interest rate increases on a monthly basis, which has led to cost-of-living pressures and so on and so forth,” he explained.
“Through these challenging times, the adviser’s role is really to play a number of different roles, that being of coach, that being of adviser, that being of psychologist. And the challenge for advisers is to ensure that clients are sticking to their financial plans, staying the course.
“I think a lot of times, the real benefit of an adviser is to ensure that clients aren’t doing anything silly through these periods. So certainly, the market dynamics is a challenge at the moment.”
Mr Hraiki also pointed to cost pressures on advisers thanks to a decade of regulatory reform as another factor making life tougher for the profession.
“We’ve had the royal commission and flow on impacts there, FOFA preceding that. That’s led to a focus around compliance and a change in operating rhythms for a lot of financial planning firms and AFSLs,” he said.
“So, those cost pressures have led to an increased cost to serve. It costs more to provide the same level of advice to clients. That’s probably a challenge for a number of advice firms.”
Scale is another area of concern, he said, both in terms of attracting new clients and servicing them once they are brought on.
“Focusing and having the time to attract new clients, the ways in which you attract new clients, the business development activity,” Mr Hraiki said.
“In concert with that would be once I’ve attracted the clients, how am I servicing them? The cost of service increasing, how am I building the scale and efficiency to be able to effectively service my clients?”
To hear more from Mr Hraiki, tune in here.
Spoken by someone who has only ever been in platforms and selling SMAs to advisers. Never been an adviser or managed/lead advisers. Stick to talking about platforms and SMAs Marc…
Another non relevant voice making noise for the sake of it. Mr Hraiki what do you think financial advisers actually do?
I’m doing my best to dissuade my son from becoming an adviser. This is the worst it’s been in over 25 years and deteriorating by the day, as per adviser numbers. Thank you, Mr Jones.
Clearly spoken by someone who has no idea about what financial advisers actually do or what we have been through. Marc what about the eduction requirements financial advisers need to obtain? Wait you haven’t done them. What about the professional year for new entrants? What about the changes of how people find a financial adviser now? Lonsec surely has better representation of the adviser landscape….
An article which yet again displays the invisibility of the specialist risk adviser in all of this. Journalists, industry commentators, politicians all refer to advisers as ‘financial advisers’ or ‘financial planners’ but very rarely consider the plight of specialist risk advisers.
You all know this but risk is a very different discipline to investments. Risk still, in the main, has to be SOLD. Yes [b]SOLD[/b]. To those out there who see themselves as above selling, you’re mistaken. Nobody is above it. We all succeed in life based on our ability to offer service to others and others are assessing and ‘buying’ us every day whether we accept that or not. Best salesman in the world? . . . ever seen a baby with healthy lungs sell its mother on the idea it is time for a feed?! Yes, we are all ‘selling’ [i]every single day[/i] of our lives to someone to one degree or another. Have all the paper qualifications you want – all good – but the real successes in life are those who know how to [b]sell [/b]the best.
So, how about it? Will journos and article commentators please acknowledge that specialist risk advisers have a place in this too but face different challenges and compliance risks and not lump them into the ‘advisers’ bucket with investment advisers and financial planners, please.
Talking about timing, Pete, are you too having the time of your life in the Life Insurance industry / profession / sales ? I’m guessing it’s tough out there, for us all.
Stop looking for your carve outs with your Cohen brown sales speak. You want to just sell insurance? Do general insurance broking, sell house and car insurance. Leave the advised stuff to us that advise, easy. You riskys asking for these carve outs all the time just shows you haven’t been able to move forward. Id like carve outs too, but im also happy to make sure my clients arent just being flogged insurance from one of you dinosaurs.
Your contempt for Peter James is probably a reflection of the contempt with which we are all being treated by Mr Jones. Yes, financial advisers, investment advisers and everyone else registered as an AR… also, those insurance ADVISERS.
Thank you Adam. I not only don’t know who his “Cohen brown” is but I feel he missed my point. It isn’t [i]so much[/i] about selling product. It is about selling yourself. People won’t buy what you are suggesting to them until they have bought [b]YOU[/b]. He’s missed this, as judging by his tone I think he’s missed a lot else in life, sadly. Thanks again for your understanding and comments Adam.
no one operates in the insurance space anymore. It died about 5 years ago. Don’t think they care about that 1% of Advisers that provide risk advice. When the number of advisers are now diddly squat.
There’s still a reasonable number of [i]riskies [/i]but declining rapidly. It is my contention that there’ll be next to none left by 2026 when the inappropriate red tape, compliance, 2 year chargebacks and ‘far too low’ unsustainable commissions will have finally taken their combined toll. When the insurers lose their independent ‘riskies’ who write most of the business there will be unprecedented times and it will really hit the fan for them. Biggest loser, of course, will be the clients. The phrase[i] ‘client best interest’ [/i]has always been and is still foreign to politicians chasing their soundbites.
That’s me, done. It’s not even 2026. Insurers dropped commissions and raised premiums whilst doubling responsibility period. Meanwhile, ASIC / AFCA making life hell. “No better time to be an adviser” ROTFLOL.
All advisers need to be proficient in sales, regardless of their specialisation. All advisers need to understand insurance, regardless of their specialisation. All advisers need to understand investments, superannuation, tax, and estate planning too, whether they are specialised or not. Because all these things are interlinked.
Cardiologists, neurosurgeons, urologists, orthopeadic surgeons, gastroenterologists, are all doctors. They have all done the same base level of training as other doctors, across all medical disciplines.
That’s why “riskies” are now lumped into the adviser bucket. No-one is suggesting sales isn’t an important skill, or that specialisation isn’t appropriate. But in an age of professionalism, there is a reasonable community expectation they are well trained advisers who have chosen to specialise. Insurance specialists are now called “advisers” in the same way cardiologists and neurosurgeons are called “doctors”. It’s a good thing.
Well said Anon.
Another non-planner claiming it is a great time to be financial planner.
Take it from an actual financial planner, it is a terrible time. Stephen Jones and the ALP are trying to tax us out of business with the ASIC levy and compensation scheme of last resort, meanwhile allowing conflicted product providers to provide free “advice” from unqualified advisers who don’t incur the taxes/levies that qualified advisers do.
This flawed and naive opinion piece makes me doubt Lonsec’s credibility
I checked on the Financial Planner Register, there is no mention of Marc Hraiki being or ever having been an adviser. His opinion is null and void unless he wants to put his money where his mouth is. Being an adviser isn’t getting any better and the QAR, which some thought would improve the situation, will do nothing.
…then, why are so many advisers contemplating leaving sooner, rather than later? All I see is increased costs (ASIC fee), increased compliance (SOA removal is incidental), increased competition (super funds), increased pressure on fee-pricing.