Speaking at the Stockbrokers and Investment Advisers Association (SIAA) conference in Melbourne, three advice associations discussed how the industry could increase the supply of professional advice.
Financial Advice Association Australia chief executive, Sarah Abood, and the SMSF Association chief executive, Peter Burgess, joined SIAA chief executive Judith Fox on the panel.
One topic raised was the ability of career changers to move into the profession as an alternative to university students.
Abood said: “The demand/supply imbalance is already very bad. We know that demand for what we do – proper professional financial advice in the interest of the client and considers the whole market- that demand is already in excess of supply.
“We could double the number of advisers and still not even touch the sides of consumer demand. This demand is continuing to increase and we absolutely need to address that gap.
“Do we need to look offshore? That’s very topical now with the government looking to put caps on international students. We are underrepresented in a number of cultural and linguistic groups so we are not restricting ourselves.”
This was a matter touched on by Fox, who said the few pathways to enter the industry was having a counter-effect on efforts by the industry to improve diversity.
Burgess said a regulatory burden could deter people from entering the industry.
He said: “It’s naïve to think that if we get this right that a flood of new advisers is just going to appear automatically as there are other things we have to do. We need to get the message out there that financial advice is a good profession, but the regulation and compliance burden and red tape that advisers deal with every day is a disincentive for people to move into the industry.
“I was talking to an adviser and he said he wouldn’t recommend his children to become an adviser because it’s overly regulated and there’s too much compliance.”
One area where there could be a source of new entrants is the possibility of accountants and teachers who are looking to have a career change.
Burgess said: “We think they can play an important, bigger role in giving advice to clients. If we are serious about bridging this gap, then we need to find a way to get qualified accountants back in the game and be able to give some form of personal advice without necessarily being licensed, although they need to hold the relevant qualifications.
“This would make it easier to get licensed, but it won’t solve the problem because they have problems with the Professional Year. For an accountant to undertake the PY is very difficult as they have to be supervised by a licensed adviser, and if they aren’t working at a licensed advice firm, then that is very difficult.”
You have to be kidding! This is a horrifying scenario. The focus must be on getting more fully qualified advisers into the industry.
Will not work
Teachers, hey? Most of them are very good at what they do as educators, but they mostly by their own admission, do not have an appetite for financial matters. Also financial advising is a democratic process and teaching is autocratic by its very nature.
Absolute rubbish to claim you could double adviser numbers and still have demand. I can take more clients, and there are always businesses doing paid google adverts so they could too. I bet if they actually asked the room who in the audience wants some more clients, nearly all would stick up their hand.
Perpetuating the myth of a shortfall of advisers provided the avenue for “qualified advisers” for big product providers.