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The other casualties of advice industry reform

Whilst the enormity of mental health consequences has rarely received a second thought by legislators as they vehemently imposed non-stop change on the advice sector since 2001 with the FSR Act, even less regard has been given to the impact on the partners and children of financial planners.

There are very few industries, if any, that can compare to the advice sector for the intensity of industry scrutiny, reform, change and compliance demands.

More recently, FoFA, escalating education requirements and plummeting values of businesses after a lifetime of endeavour have quite literally been the final straw that's shattered the lives of professional, dedicated practitioners - both mentally and financially.

Like so many SMEs, most planners began their self-employed journey as a 'start up' and after years of perseverance established successful commercial enterprises. They built an asset that would ultimately fund retirement by sale or BoLR arrangement as a benefit of long-term loyalty.

In order to achieve this, the spouse was critical as sole parent, partner, 'family rock' and peacemaker as the planner husband or wife spent so many long hours servicing the complex financial advice needs of clients.

In addition, the partners were often called on to act as the business receptionist, accountant, bookkeeper and general administrative support. This is often an immense role that is regrettably going unrecognised by legislators in their zeal to achieve industry reform.

With the pressure on these life partners so immense and unrelenting, it's not uncommon for them to have developed serious feelings of guilt and inadequacy about their home environments, parenting skills and role as a spouse. In many instances, these emotions have compounded over many years, resulting in strained relationships where tensions can often flare to dangerous levels.

There's no doubt a survey would reveal that, included amongst the downsides of an extended career for many planners, the life partner they started the business with is not the one with whom they retire.

The constant spiralling and intensity of demands of a planning business on families of their owners, especially since 2001, have quite literally been staggering - so much so that many planners are required to start the working day before 8:00am, culminating in 12-to-14-hour days, including evening appointments.

Planners' life partners often have no option but to step in and be the lonely peacemakers keeping the family functioning. For children, the advice practice is the unwelcome demon sibling to whom dad or mum devotes the majority of their time, passion and energy - at their expense!

As planners recovered from the GFC and the collapse of numerous MIS schemes, and while mature age practitioners' thoughts turned to retirement and the prospect of a well-deserved rest, gracious future and time with family, including making peace with disenfranchised children, along came the perfect storm.

In 2019, FASEA, education requirements and crashing practice values - destroyed through the legislated removal of income from their businesses - mean the planned exit and succession aspirations for many advisers have evaporated, devastating the lives of many planners who can no longer cope.

This cumulative impact on planners cannot be overstated. Far too many are unable to cope and are struggling emotionally with mental illness and distress. Real examples of this inability to cope include:

  • Confirmation by practice broking businesses that long-time advisers regularly break down over the phone with them when discussing the sale of their business
  • Licensee firms in which up to one third of their advice business practitioners have admitted they are suffering mental anguish, and where some have been hospitalised due to stress

These same advisers, however, often continue to present a stoic persona to their peers and even to their family, while they suffer inner turmoil and pain - in isolation and without help.

Into this battlefield, which is now stressing advisers and their families to breaking point, the adviser's husband or wife find themselves having to step-in to support their spouse and save the family.

Fearing for the well-being of the planner developing mental health issues that could potentially escalate into depression and the complete destruction of the family '...if somebody doesn't do something', the planner's partner feels compelled to rescue both!

It is heartening to see dealer groups, professional associations and media groups reaching out to help planners cope with mental illness. But where is the ally and support structure for planners' partners to help them save their spouse and their family?

This is one of the dark sides of industry reform when detached legislators, bureaucrats and self-interest/lobby groups (on regular pay packets) seek to impose industry change without any sense or appreciation of the impact their actions may have on the lives of self- employed people and their families.

6 comments so far
  Thank you for shining a light on the partners. It's an important conversation and seems to have been mostly neglected to date. The mental health fall out from the changes is real, along with the financial and emotional fallout. We need to keep reaching out and making sure we're asking 'R U OK?' and hanging around long enough for the real answer.
AMANDA CASSAR  |  5 AUG 2019   8.23AM

The most insightful and compassionate narratory I have seen that understands what is going on

Your comment "This is one of the dark sides of industry reform when detached legislators, bureaucrats and self-interest/lobby groups (on regular pay packets) seek to impose industry change without any sense or appreciation of the impact their actions may have on the lives of self- employed people and their families." is spot on and I am one of their victims, and I have told them a couple of years ago that ASIC was the biggest danger to our business.

COLLIN VOST  |  5 AUG 2019   9.44AM
  This is unconscionable behaviour. If it was the car industry the government would bail them out because so many jobs would be lost. Its always on the news that plants and mines are shutting down and the terrible toll it takes on those families. For some reason, Joe Public thinks that all advisers are rich beyond comparison. Far from the truth. Its their passionate vocation in life to help others and, then, hopefully walk away with the same amount of super that their clients have. We could have all worked for the government instead. So wheres the class action for compensation for lives destroyed emotionally and mentally and businesses decimated? "Pain and suffering". An article in the financial press this morning states that there could be an exodus of up to 50% of advisers. No job or career is worth the mental anguish.
HELEN POSTLE  |  5 AUG 2019   10.26AM

ASIC is, without doubt, at the core of this and most other traumas besetting the planning profession. Rather than being a consultative, well-meaning and caring entity, assisting the planning profession in its vital role in protecting the financial security of Australian families and small businesses, ASIC's attitude - indeed commitment - is blatantly to be as obstructive to the everyday endeavors of dedicated financial planners as possible. Well, the day of reckoning when these 'human truths' are revealed in all their starkness is fast approaching, and we, the planners, and the professional bodies that purportedly represent us will hold ASIC with its Machiavellian policies to account.

Enough is enough

To quote the Great Bard: 'There is a tide in the affairs of man.'

JACK WELLINGS  |  5 AUG 2019   11.40AM
  Good to see an empathetic run down and commentary of what has been occurring in the Finance and Advisory sector. Just a shame pollies can't see the wood from the trees. It's a great shame that so many good people in the Industry who have endeavoured to genuinely care for their clients whilst at the same time build a business, have been bundled in with a few opportunists and have had the rug pulled from under them. The red tape and bureaucratic nightmare that has been created by Pollies and Bureaucrats is never ending and the fact that their is an unfair playing field between Industry Funds and Retail Funds is a disgrace. Another example of Socialism by stealth!
DAVID BOND  |  5 AUG 2019   8.24PM
  Thankyou. A heartfelt and accurate article. What doesn't kill you makes you stronger, right? In our case, we are a husband and wife team who do this to try and make our clients lives better. Never did we think we would be beaten and kicked this hard for the right motives. It destroys ones belief in "the system" where "you have a go, you get a go"
SHELLEY FISHER  |  17 AUG 2019   11.11PM
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