The average suicide rate in Australia is 13 per 100,000 (ABS, 2017) and sadly over last 12 months 16 Financial Advisers have committed suicide which is about 3.25 times the national average. (Keep this in mind when reading the below) An industry expert has described the current state of mental health and wellness of financial Advisers as being at crisis point as a result of the fallout from the financial services Royal Commission and changes to the financial services landscape which we have all had to accept.
Imagine if it was announced that you worked in an industry for the last 10 years and in some cases, my colleagues (up to 40 years) and you had obtained all your qualifications which were required, only to be told you would have to repeat your education and undertake further assessment and training at your own expense while only having five years in which to do so. You would also have your ongoing remuneration reduced and your costs go up from your Licensee, the different regulatory boards and system providers due to compliance. This is exactly what is happening with Financial Adviser’s in Australia at the moment.
Imagine further if the body entrusted with managing this process spent two years deliberating over what the requirements would be, leaving those who want to stay in the industry in limbo while boatloads exiting at a rapid rate with a total of 3,400 Advisers leaving in the first nine months of this year (which equates to about 13% of the industry).
The pressure that Advisers are under is real and the consequences can be devastating. Too often we forget that Financial Advisers are human beings with families that make up a profession and while some might be well off, there are others that are just starting their business or others looking to retire that have had their whole life turned changed. While the government and regulators happily pursue a radical reform agenda with minimum input from those in the industry itself, little thought is being given to the Advisers who are being forced out of an industry we were part of building.
Equally, the number of Advisers joining the profession over the last quarter was not entirely unexpected either. There were 10. Just 10 people who entered a profession due to new education requirements, that most likely will be one of the most in-demand over the coming 20 years, as baby boomers look to retire and hand over their wealth to the next generation.
This is what is happening to financial Advisers:
I started RP Wealth Management 3.5 years ago and with the above changes my business has still grown and we have just taken on a new full-time starter while continuing to bring on new clients and while at times I have felt that things are overwhelming, I have still managed to work closely with clients and helped achieve a number of their personal goals including:
So I write this blog to highlight what Financial Advisers are going through with not only our careers but our identity as it is also unfortunately increased the cost of advice which nobody wants and has come as a result of a number of bad apples changing the industry for all.
While the changes will result in a better outcome for clients, not a lot of thought has been given to the Advisers as it comes with a ‘Just deal with it’ approach.
Fortunately, I am in a situation where I didn’t buy an existing business where the value would drop by up to 40% if I bought 3 years ago. I have also managed my costs very closely and sacrificed my income by investing further in the business as this profession will never run out of clients that need professional advice.
So, if you are looking for a Financial Adviser or currently have one, please understand that we are currently undergoing drastic changes to our industry with requirements increasing and remuneration decreasing.
Reach out if you know an Adviser and check in to see how they are doing, as a number are thinking that everyone is against them when banks have turned on them, the regulators have turned on them and their income is disappearing.
I know I will continue to stay in this industry and continue to strive to do the best for my clients and my business as I love what I do.
Sources:
https://www.ifa.com.au/news/27030-suicide-and-broken-families-the-true-cost-of-advice-reform_
https://smsmagazine.com.au/news/2019/12/09/advisers-mental-health-at-crisispoint
https://www.smh.com.au/business/banking-and-finance/get-over-it-go-broke-move-on-financial-planners-rocked-by-banks-exit-20190809-p52fgx.htm