The financial planning industry remains resilient, with only a small percentage signalling their intent to abandon the profession in the face of increased regulation and heightened education standards.
According to a recent report put out by researcher Investment Trends, only seven per cent of advisers say they will cease providing advice when the Financial Adviser Standards and Ethics Authority’s full suite of education requirements is implemented on January 1, 2024.
When the standards were first announced, industry reports estimated the number of advisers that would leave because of FASEA’s standards at between 20 and 50 per cent.
In addition, the Investment Trends report states that only 11 per cent of advisers have signalled they will leave the industry if the full recommendations of the Hayne royal commission are implemented.
According to Recep Peker, research director at Investment Trends, most advisers are willing to adapt to the changing conditions around them.
“While heightened regulation will add time and cost pressures to their business, the vast majority of financial planners have no plans for leaving,” Peker says, before noting that advisers will need to adapt to new market realities. “However, planners recognise the need to evolve their business not only to satisfy regulatory standards, but also to meet the demands of shifting consumer preferences and an uncertain investing climate.”
Peker reveals that over two-thirds of advisers says the royal commission will force them to accelerate their adoption of technology to serve their clients better.
“By using technology more effectively, planners believe they can enrich their client engagement capabilities, helping them better demonstrate value to existing clients and to expand their pool of potential clients,” Peker says.
The Investment Trends data comes from the 2019 Licensee Satisfaction Report, now in its fifteenth year of publication. Over 1000 advisers were surveyed.