Stephen Jones with QAR lead Michelle Levy at a Conexus event earlier this year.

The government’s four-page Delivering Better Financial Outcomes reform roadmap is an industry growth plan.

It is not perfect. For example, the proposal to call customer service representatives employed by financial institutions and product manufacturers “qualified advisers” is a grave mistake but the broader package of reforms promises to make good on the Quality of Advice Review’s objective to make financial advice accessible and affordable to more Australians.

The government’s reform package could also solve the advice industry’s biggest problems, namely the ability to attract talent and attract clients.

According to Wealth Data, over 12,000 financial advisers have retired or handed back their registration, since the Hayne royal commission, representing a 43 per cent decline in the size of the market in just five years.

While the bleeding finally stopped this year, only around 260 new advisers have joined the industry so far in 2023. An additional 334 provisional advisers registered for the professional year.

For advisers focused on growing their business and helping more people, the numbers are dire.

Lack of talent is the single biggest challenge facing financial advice businesses inside the AZ NGA network.

But Minister for Financial Services Stephen Jones’ proposals create a financial adviser pathway. By easing the compliance burden on advice businesses and making room for a new category of adviser that does not need to be degree qualified or undertake a professional year, a career in financial planning becomes a legitimate option for more people.

If implemented, the regime will bring thousands of new entrants into the industry.

They may start out in the call centres of financial institutions giving limited product advice with nothing more than a diploma, but the country’s future professional financial advisers will come from this large pool. It will also produce future paraplanners, support staff and business leaders.

A few years down the track, this pool will be an important source of talent for professional advisory firms.

Similarly, professional advisory firms should be thinking about hiring, training and mentoring their own qualified advisers (more on this later but let’s just use that term for ease).

Qualified advisers will be cheaper than professional advisers and able to perform some comparable tasks, freeing professional advisers to focus on higher value, revenue generating activities.

Concerns that the government’s post-QAR package opens the door for financial institutions to get back into personal advice are valid but the world they are returning to is markedly different. The problematic and disastrous combo of product commissions and vertical integration is gone, and stronger consumer protections are in place.