I read with great interest the excellent analysis of Adviser Ratings regarding the number of advisers leaving the industry, and those due to leave over the coming four years. Basically, the numbers say that around 14,000 existing advisers will leave the market. This will have a net effect of -6000 advisers after taking into account new graduates and accountants.
Overlay this with the HILDA data released this week. More Australians than ever before are suffering from depression and anxiety, in fact one in ten Australians take an antidepressant every day. More men in urban Australia are dissatisfied with their lives and jobs than anyone else, and disposable income is on the decline.
This does not paint a pretty picture over the next five years – for advisers, or for Australians.
As the adviser business model continues to be challenged, more Australians than ever before need help, both financially and emotionally.
For advisers, whom I have found to be people who truly want to help others, it makes it almost impossible to service a large section of Australians that definitely need advice.
While young advisers might find a way to deliver basic personal advice to people at a lower cost, an adviser with overheads to cover will never be able to deliver advice cheaply enough to serve the largest part of the market. With increasing education standards and the entire industry in upheaval, it’s likely that a large part of these 14,000 exiting advisers put their hands in the air and say, “too hard.”
While I believe that ultimately the change will make for a better and fairer industry, in the next five to 10 years, it will be a very tough market to grow a business, and an even tougher one for the average Australian to afford advice.
It would be easy to think that our problems are near impossible to solve, and that things are only going to get worse.
The one light that shines, however, is people’s thirst for self-education. I see more advisers than ever taking advantage of using simple communications and social media to spread the good word about financial advice. Many of them know that their readers will never be clients, but may well refer others on, or just implement great ideas themselves, inspired by what they read.
We have had an overwhelming response to our TV program, Secrets of the Money Masters, and the continued success of the Barefoot Investor book tells me that more Australians than ever before know they need to understand more and listen to experts.
So while the pain of a changing industry may continue for advisers for some time yet, and the need for financial advice may be greater than ever, there are some green shoots appearing – that the thirst for education and self-responsibility will continue to grow in this country. And for those advisers who intend to stay and serve the Australian public: let your voice be heard. It’s both necessary and timely.
Until next time,
The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here.