In a recent webinar, AFA CEO Phil Anderson said the upcoming Quality of Advice Review (QAR) – which will investigate whether there are opportunities to streamline and simplify regulatory compliance – has an opportunity to key issues in the advice industry, including declining adviser numbers.
“We need to make sure that we have a focus on retaining as many of the existing advisers who are considering their future,” Mr Anderson said.
“But we also need to make sure that we have a steady flow of new advisers coming in to the advice profession so that we can start to rebuild adviser numbers.”
It was revealed late last year that the number of Australian advisers shrank below 19,000 in 2021 and is predicted to reach 13,000 by the end of 2023.
However, a report released just weeks ago by Adviser Ratings has predicted that a further 2,387 advisers will depart in the industry in 2022.
In the webinar, Mr Anderson outlined four key objectives for the QAR:
- Reduce complexity
- Reduce the cost of advice and the cost of running advice businesses
- Improve the client centricity in the advice and services processes
- Ensure that financial advice is a sustainable profession
“Our goal in this exercise is to get as many high priority initiatives across the line as possible,” he said.
In a separate webinar last week, shadow financial services minister Stephen Jones said he believes “there is a need for us to put in place a transition arrangement” for advisers in their latter years of their career should Labor win this month’s federal election.
“So halt the large-scaled exit of advisers who are otherwise competent and have a capacity to perform a job that is needed to be done,” Mr Jones explained.
“I’m thinking largely of people who are in the latter years of the profession — they’ve had no problems, they’ve provided high level competence of advice, often thought of as mentors to others within the industry…”
The real issue will be that, even if there were enough new entrants to supply the demand, the younger, inexperienced advisers replacing the long term, trusted and highly competent ones, might have the quals, but not the maturity, life experience and confidence that clients so highly value.
What clients value, and what successful advice actually looks like has been totally ignored in this entire process.
Allow advice to become a functioning profession, remove regulation and political influence and we may have a chance of retaining enough advisers.
QAR and ALRC will be the last chance to do achieve this.
They only now realize the mess they’ve created
Shouldn’t the first question be how many financial advisers does Australia need? We never needed 28,000 and higher standards, if properly implemented, are not a bad thing. The issue has been the poor implementation and lack of longer term planning
Frydenberg & Hume have already answered that = NIL Real Advisers.
Thus the Banks and Life Companies can flog products again via Robo Advice.
The only reforms that will eventuate is that Super funds will be able to more efficiently provide advice.
define efficiently…
Lots of talk but noticeably very little action from government / parties despite the pressing need to secure votes.
never gonna happen
The key way to eliminate red tape complexity is to remove the Hayne2 Annual Renewal Fee. The Govt should adviser the Super fund Trustees that they should follow the existing Corps Act 962A(3) legislation which permits a fixed fee for a fixed time period. eg $100 a month for 36 months. (not just $300 for a max of 12 months). Until this occurs, small clients will not be able to access ongoing service support.
Too little Far too Late ex 30yr plus adviser