(As featured in the Financial Standard)
Since the outcome of the Royal Commission into the state of Financial Planning within Australia, the industry is going through a significant period of change which will continue for the foreseeable future.
The problem is whether you are a great Adviser doing everything by the law and in your client’s best interest or are one of the dodgy Adviser’s that the industry is attempting to weed out – You will be tarnished with the same brush.
Financial Planning costs, educational standards, compliance regimes and processes as well as decisions by the Government to make changes to the industry without proper thought and planning have led to a number of Adviser suicides, mental health issues, businesses shutting down and increased costs to consumers pushing the median cost of Financial Advice up- making it unaffordable for many Australians.
It’s reached a point where almost two in five surveyed advisers have said they would consider leaving the industry due to stress, according to a recent study. A further 17 per cent said they were unsure if they will stay in financial advice.
In 2018 there were approx. 28,000 Advisers before the final report from the Hayne commission. Following this, just under 2,900 Advisers left the industry in 2020. A recent analysis has found that number will reduce to approximately 17,000 by the end of 2021. That is close to 40% of Advisers leaving in such a short period of time.
I set up my business in 2016 and since then I have grown my business from 0 clients on day 1 to approx. 100 ongoing service paying clients and in that time the business has been hit with:
As a one Adviser operation right now, my ongoing costs just to run the business have gone up to over $50,000 a year for fees and compliance with no input in the matter as we are just being told to deal with it.
We have also had insurance commissions stripped, clawbacks on remuneration received, removed revenue sources and elimination of certain benefits that were fully disclosed to the client and agreed to. If you were an AMP Adviser than you would be living through a private hell right now by being told your business is less than up to 50% of what you were stated it would be worth if you decided to sell as well as having to pay a loan back that is larger than the sale price.
As my business continues to grow, it has highlighted an increasing number of people that require advice and a shrinking group of professionals that are authorised to provide this. I have seen several of my colleagues leave the industry and also a number of them experience substantial loss in revenue and livelihood due to changing legislation.
I love what I do and genuinely hope the Politicians see that without Financial Adviser’s, a number of people would have been a lot worse off during the GFC and 2020 covid crisis without making the right financial decisions with the right advice.
While my business remains strong and we continue to grow, spare a thought for those out there doing it tough and experiencing a change to their livelihood.
There isn’t a week that goes by that I think is it worth it to stay in the industry when it seems like everything and everyone is against you but then I see my client’s and hear their feedback, I remember why I love my job and that I can make a difference in people’s life’s.