There might never be a good time for a global pandemic to hit, but the impacts of the spread of Corona virus along with the associated lockdown of cities and regions around the world came at a pivotal moment for the local advice industry.

With the fullness of time some might conclude the crisis in markets and society became an essential catalyst to reseat and redirect the advice industry’s path.

It was February 20 when financial markets peaked before tumbling for a full month until reaching a bottom. A gradual reflating of asset prices since has seen local equity markets regain more than three quarters of the value they lost during these harrowing weeks. From its peak on February 20 to its nadir on March 20, the S&P200 was down some 36 per cent before recovering most but not all of its value by late December.

Advisers hit the phones to quell fear among their clients, Professional Planner found in its reporting which ramped up during this period. The client/adviser bond was particularly prevalent among individuals who had just retired or who were about to retire – many of whom had saved and worked their entire lives to then live through a dramatic market draw down at the most inopportune time in the context of their lifecycle.

In the heat of the carnage it was the supposed shape of the recovery that grabbed the most headlines and column inches, but as time passed during the year, people soon broadened their horizons from short term week-to-week thinking, towards value creation opportunities in the years and decades ahead.

The months between March and May were indeed a case study in how strategies, business models and indeed entire systems performed in the grips of a crisis like one no one had ever seen before. Some great stories have emerged since describing how models performed, particularly from advice practices with implemented approaches such as managed accounts.

Unprecedented quickly became the description de jure for what was happening all around. Early access to superannuation, liquidity concerns among the countries largest and most prominent super funds had surely tested the foundations of the country’s most important wealth pillars. Meanwhile, the RBA and central banks globally moved swiftly to sure up economies as the engines of consumerism and capitalism ground to a halt.

The austerity continues into 2021 and for the foreseeable future as interest rates remain at their bedrock and the stimulus programs continue to be an essential lifeline for so many businesses, individuals and households, which may otherwise be teetering on the brink of financial disaster.

The great reset 

But the resetting and redirecting of layered and banged together regulation could become the advice industry’s biggest silver lining from the year, a process that was germinated during the crisis but has since been pushed along by a minister with fresh eyes and an overall belief that common sense could prevail.

There were calls early on in March for a pause on all regulatory changes, something that was inevitable as parliament was unable to sit and business as usual discussions were sidelined for crisis measures, a situation punctuated by a federal budget delayed until October.

Relief supposedly to facilitate advice on early access to superannuation along relief to extend the timeframe for providing critical statements of advice and enable a record of advice to be given in certain circumstances came quickly, which could have opened the door for more permanent reforms announced in December to combine advice documentation.

Meanwhile, the reprieves given to advisers to adhere to FASEA guidelines were celebrated as a win at the time, but ended up being much less significant than the complete dissolving of FASEA less than six months later.

Regulators and policy makers started the year with a big stick to punish the advice industry emboldened by the findings of the Hayne royal commission, but the year ended with a much more constructive approach to solving the puzzle of how to get affordable and quality advice to more Australians.