With 2021 done and dusted, it is worth reflecting on the challenges that we all faced last year, but also keep in mind, the hope that we all should have for the future of our emerging profession.
This time last year, we couldn't wait until the year had come to a close, believing that 2021 had to have much more in store for us than just legislative overwhelm and continued challenges in delivering advice affordability. Unfortunately, it probably didn't live up to the hype!
However, if the past two years have taught us anything, it is that advisers, and their support and service providers, including their licensees, are robust and resilient given everything that has been thrown at all of us. I do honestly believe that the best is yet to come, however, we will have to strap ourselves in for a somewhat turbulent ride to get there.
This year, the reality of the FASEA education requirements decimated the adviser community, with the continued exodus of experienced advisers, and many fed up with the constant moving of the goalposts when it comes to compliance and governance. This is of course, ongoing with the FASEA exam extensions, as well as many advisers hanging around until the January 2026 degree cut off.
Inevitably there will continue to be quality, client-focused advisers that decide to leave financial advice, and the impact of this will be felt not only by all of us but more importantly, the average Australian out there seeking quality financial advice.
There continues to be a challenge attracting new advisers and graduates to the profession, and in all honesty, who could blame them? The level of dissatisfaction amongst our ranks, mental health challenges, and the continued difficulties in operating a profitable and client-focused practice, has resulted in the advice community not being in a position to advocate for the profession, to entice large numbers of new entrants.
After all, it is difficult to recommend a career path to someone, when there is such uncertainty surrounding advice regulation and compliance, not to mention, practice valuation.
AFSL groups continued to consolidate this year, with many believing that the small and medium dealer group will be a thing of the past. The benefits of scale will indeed be behind many continued acquisitions, as PI costs are skyrocketing, as are the continued operational costs of running a sustainable dealer group.
The competition for adviser growth continues amongst dealer groups, with many having ambitious adviser growth targets in place in recognition of the importance of scale in ensuring long term viability. This is despite the reality of an ever-declining number of advisers.
Advice practices that have switched licensee, purely motivated by fee discounts, will potentially create more disruption and costs for their business down the track when they realise that the service, support, and infrastructure that is in place, may not best suit the future needs of their business.
Lifespan has continued to grow throughout the past twelve months, and we have focused on ensuring that we are providing meaningful support to advisers, to help them navigate all of this continued uncertainty. We have an amazing, close-knit advice community, and the connection that our advisers have with one another, and with the Lifespan team, has galvanised all of us, to continue to persevere and work through the challenges that we continue to face.
Last year, if anything, has been a reality check for all of us. To assess why we do what we do, and why it is so important. For those of us that do stick it out, we will inevitably be in the box seat. Less competition due to fewer advisers, and the inevitable continued demand for quality advice will enable us to price our advice more sustainably in the future.
Over the Christmas break, it has never been so important to reconnect with those we love, and welcome 2022 with a positive frame of mind, knowing that we are capable of weathering whatever might be thrown at us!