Scared consumers turn to wounded advisers

I have said previously that ASIC,APRA and others have ruined this once great business.

I always felt that the ordinary person would be the loser. ASIC and others are so far out of touch with life at the coal face.

Wow.Well written Barry.

Hope you forward this to your local member .

Nothing short of brilliant ...... these regulating lawyers of asic and the royal commission ( which was going after the banks- and got us instead , since the bankers still keep getting their salaries) all on fixed salaries telling "" consenting" adults how they should do " business"!!!! What a patriarchal joke .... and still now as incomes fall they haven't taken a sympathetic pay cut ( like the Pollies telling us we should stop work and stay safe and poor)

And let's not forget the institutions jumping the gun and turning off trail commission way before the legislated date - trail that was an arrangement on paper between the product manufacturer and the adviser.... don't deals matter any more ..... ask mlc, colonial first state ....and who are turning off the income ?? Salaries folk who won't feel the pinch ..... ahhh what price self righteousness and penny pinching ?

About 20% of advisers have departed since January 2019 or around 5,800 individuals. If 20% of doctors or chemists departed the profession in a similar time frame it would be front page news and questions would be asked, yet all we hear about this exodus is silence!

Brilliant and unfortunately accurate. Please circulate to all MP's . The so called "reforms" have enabled the fattening of industry funds at the expense of the provision of advice. Where has that gotten everyone now ? Investment funds indulging in unlisted , reportedly illiquid investment choices , unaffordable advice options weighed down with mountains of regulatory compliance ,and a depleted stock of professional advisors .That is where this has gotten us ! I have no qualms with improving and continually improving any profession , but regulators , swollen with compliance and legislative budgets, should acknowledge this predicament - one that has been created in the name of "reform" for the purpose of consumer protection !

Advisers who entered this business and built up, brick by brick, over many years, a viable commission-stream that funded thousands of jobs and business growth, have seen their income-steam deliberately sabotaged and their businesses desecrated.

Underlying all of this has lain political ideology masquerading as (so-called) Consumer Protection.

In the words of a certain Federal Finance Minister a decade ago: 'Can't you see that no commission will be better for your Clients?'

Opt-in, Fee Disclosure Statements, absurdly meaningless (but absurdly costly) Statements of Advice, removal of commissions, the intellectualisation of simple matters (do I really need a Masters to sell a simple insurance policy?) - have all contributed to the process of making unviable the practice of financial planning.

What was wrong with 'selling' insurance policies and savings plans?

I am mindful of the motivation of the founders of one of Australia's largest insurers: "To popularise Industrial Life Assurance and to carry it to the working classes". And another: "Founded for the welfare of the widows and orphans of Sydney Town".

The actions of governments and their agencies have done nothing to further these tasks and their ideals. In fact quite the reverse.

It's time for a radical rethink - and urgent action. It's almost too late.

Maybe the answer lies in the past.

Well said Bai Ree

I really feel or those honest advisers out there , my heart goes out to you ! After many years of passion and care for my clients I felt enough was enough. I was horrified by the added complexity and red tape , not to mention the big corporate greed that started all this !

Great observations here. The Industry is downtrodden and inappropriately led. What did you expect ?

As someone who has studied the financial advice industry closely for a long time now, my sense is that the industry has brought its problems on itself. The regulators are an easy target, but they would not have got involved if the financial advice industry, as a whole, was acting in the best interests of its customers. Too many people have been hurt, yet all I see is an advice industry that fights reform every step of the way. Articles like this one, in my opinion are unhelpful. Fortunately there is a growing number of genuinely independent, genuine fee for service financial advisers who have seen the future and are embracing it.

Nice balanced article

A great article.

Most of the comments certainly support this.

What is a little disturbing though is the comments from one fellow who feels the need to push the "genuinely independant" barrow. This is not the place for this.

The industry is in turmoil.

If i was a doctor and had the same level of compliance to undertake , its likely my clients would have to stay on pain meds for an extended period and/or possibly die whilst i wrote a war and peace recommendation.

There will be many orphan clients in the years to come.

And dont get me started on the FASEA farce.