‘Neglected and forgotten’: Why single practitioners are important

While some in the advice profession accuse the government of deliberately targeting single-adviser practices to drive them out of the industry, Eugene Ardino, CEO of Lifespan Financial Planning, believes that a lack of consideration for these practices is more likely the issue.

“I wouldn’t say that single practitioners have been purposely targeted. I think they’ve probably been a bit neglected and forgotten, certainly,” Ardino said on the latest episode of The ifa Show.

“I don’t think the government’s gone out and said, ‘Well, how can we weed out single practitioners?’”

He noted that, while some reforms have made it considerably more challenging for these practices, others have pushed out the larger institutions, potentially clearing the space for smaller firms.

“If you look at what’s actually been happening, a lot of the legislative changes over the last five years have actually gotten rid of, hasn’t gotten rid of big advice firms, but it’s pushed a lot of the large institutional licensees out because they’re finding it too hard,” he said.

“But it has actually also caused a lot of smaller advice businesses to merge, or to join forces in some way with some of their peers and set up licensing and stuff. So, there’s been an enormous amount of change in structure throughout.”

While he asserted that single-adviser practices have not been intentionally targeted, Ardino noted that some reforms have imposed financial strains that larger firms can more easily absorb.

“I wouldn’t say that being targeted, but I certainly would say that a lot of these reforms and a lot of these fixed costs are a lot harder on single adviser practices, in which case, they’ve probably been neglected a little bit, and I think that they’re an important part of any profession’s ecosystem,” he said.

Ardino explained that removing all single practitioners from the profession would significantly alter the profession's landscape.

“Pretty much every other profession caters for single practitioners and has because if you’re saying the only way you can be a practitioner is to be in a big firm, well, then the only people that will be able to run those businesses are people that are good entrepreneurs and that are good at running big firms, and I don’t think you want that,” he said.

“I think you want people who just want to practise, they’re happy to practise within the rules, but they don’t want to be part of a big firm where they’re dictated on how they [work], and I don’t think we should have a framework that prohibits or makes it overly onerous for those practitioners to function because I think they’re an important part of any professional community.”

To hear more from Eugene Ardino, tune in here.