Industry hard to sell to new entrants

Instability and over-regulation in the industry have made financial advice a difficult career path to sell, according to Lifespan Financial Planning.

Eugene Ardino, Lifespan chief executive, said he was unsure if the industry was doing a good job at advertising itself.

“Not that we’re advertising there’s anything wrong with it, but I don’t know there’s enough,” Ardino said.

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“But on the same token when you’ve got an industry that is as stressed as ours, who’d want to be advertising it?

“The incidence of mental ill health is off the charts in our community, so if you’re one of those people suffering are you really wanting to make an effort to bring more people in?”

Ardino said work needed to be done before it was possible to promote financial advice as a good career path to get into.

“There are issues in terms of we’re maybe not selling the industry as a career path well, but it’s a pretty difficult career path to sell because it’s incredibly unstable,” Ardino said.

“The rules change all the time, interpretations change all the time, and penalties for making mistakes are very tough. If you’re a young person looking for a career, there’s probably lots of other things out there that are more stable.

“There’s a lot of re-building to do before we can expect to see a high influx of new entrants which is a real shame.”

The loss of experienced advisers would also be an issue as newer entrants would be unable to take on the workload, without even taking into consideration there was not a sufficient supply of new entrants.

According to the Financial Adviser Standards and Ethics Authority (FASEA), there was 590 new entrants who had commenced their professional year since January 2019, as of September 2021.

Ardino said mature businesses had a higher capacity to be able to take on smaller clients at a loss because they had more profitable businesses.

“Newer entrants are going to struggle… newer advisers are looking to grow businesses from scratch or from lower or moderate bases and they’re really choosey about their clients,” Ardino said.

“It’s hard; the fixed costs of advice keep going up and the risks involved are very unforgiving if you make a mistake.

“The real focus is on making sure all your compliance is in order to an incredibly high degree and that costs money to do it properly.”

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"Ardino said mature businesses had a higher capacity to be able to take on smaller clients at a loss because they had more profitable businesses." Ardino needs to look at his FASEA code you are not able to subsidise clients so this statement is illegal

Haha, so if what you say is true.....

Financial advice fees embedded within product administration fees and paid for by members who don't actually receive advice should be abolished immediately.

Well spotted Max - Industry Super and supporters not interested Ethics, just building and retaining FUM it appears - this fact must be getting obvious to even the dumbest supporters of Ethics/Professional Advice - Advice hijacked again by product providers with all associated conflicts.

Taking on smaller clients at a loss (that being the loss of or reduction of lifestyle)? I don't think that's illegal, just stupid. :P

Advertise?!? I have had multiple young people approach me for mentoring in the last 12 months about getting into the industry. I have turned all of them away from the industry and I feel like I have helped them make a life saving choice. When I described a day in the life, every single one of them recoiled and all have moved onto better things, it honestly felt like a community service. I will be doing my best to ensure no person I know or remotely care about makes the life ruining choice to become a second class citizen and risk it all for what most will agree is a pretty horrible existence. I certainly will not be promoting this industry to anyone and will actively be doing the opposite, I honestly don’t see how in good conscience anyone could sleep at night knowing they encouraged a young person to undertake this.

Same here, I have advised them to get into plumbing. If you have to deal with shit, you may as well do so without needing a thousand signatures a year.

ha ha priceless......thanks for the smile.

Doing similar - but mainly with clients and friends turning them against the Liberal Party.

Oh come on, according Ms Press & ASIC it’s up to Advisers to sell the value of our services and the advice profession better :-/
Which would be highly achievable without LNP, Frydenberg, ASIC, FARSEA etc and the most draconian BS over regulated Advice landscape in the world.
- Australia, ranked last for Climate policy globally.
- Australia, ranked 1st for most BS over regulated Financial Advice policy globally.
Seriously, we need to clean out the swamp in Canberra, they are a bunch of useless buffoons, hopelessly tangled in ever increasing Red Tape Regulatory crap focused on minute issues whilst they are completely lost on the big picture.
Get this LNP mob out, clean ASIC out and start again. Please !!!!

You forgot that we would also need to exclude Labor and the Unions from the advice landscape to sell the advice profession better. With these cohorts remaining, the landscape will still be as bleak as it is today... maybe even bleaker. :P

These "players" are most likely the undermining drivers of the stupid changes we've suffered.

No one should be selling financial planning as a career path. It is a complete basket case. We keep hearing the pendulum is going to swing back, but all I see is more and more red tape, more risks, more penalties, more uncertainty and more government bureaucrats controlling our profession who don't have a clue about what we do and who refuse to properly engage with us. Maybe one day the problems will be fixed, making it a more attractive career path. But I doubt it. The professional bodies (FPA and AFA) don't seem to understand the scale of the problems nor have a desire to fight for us.

The only ones trying to sell financial planning as a career path are companies that sell services to financial planners and use financial planners to distribute their products. Dealer groups in other words.

I agree... 38 years and, ....well, wondering how many more. :P

I introduced my son to the industry some 5 years ago, and now I wonder why. He does seem to be enjoying it though, so I won't be trying to upset his perception. I really hope he can flourish and continue to enjoy it.

As for recommending the industry to anybody else... forget it. I'm not going to provide bullshit advice to clients, so why should I provide bullshit advice to potential financial advice entrants. It just seems to be another ASIC and Danielle Press double standard.

Code of Ethics indeed. :P

It’s a hard sell to existing participants

You'd have to be barmy to want to become a financial adviser in Australia.

I'm in my 30's and although I enjoy seeing the benefits clients receive from my service, I would not recommend a young person seek a career as a financial adviser. No way. You jump through a million hoops and do the right thing, yet continue to be treated like crap by politicians, regulators, media commentators, etc etc.

There are other career paths that afford you more certainty, less hours, less risk, greater career opportunity, greater pay and less stress.

You would have to be a dead-set idiot to enter this industry now.

If I wouldn't advise my sons to take over my business when they leave school and uni, why would I get others to? Yes be a planner you have no certainty with anything and massive amounts of stress. No way, if I wasnt so close to my client's I wouldnt be here either. They can be real estate agents and make 15k a sale with no where near the compliance we have to go through just to do a 50k rollover! Untill this industry is fixed, it will just keep getting smaller and smaller. Sadly I dont think It will never be fixed though, there are too many hands in pies, too much confliction, too much bias against us.

The comments provided help to confirm that the frustration that I feel towards the way this industry has been treated and dealt with is not confined to me. Whilst that make me feel better that I am not alone in my thoughts the simple fact is that this is simply preaching to the converted. Continued commentary about financial planning becoming a profession and thereby attracting further entrants will not occur until financial advisers are placed on equal footing with other professionals and be allowed to be able to exercise professional judgement and covered off by PI that is limited, the same as other lawyers. remove punitive charges for minor compliance ie potential jail time for "incorrect paperwork storage" and that we are able to exercise a commercial business model without the interference of the regulators. However I fear that everyone except Advisers just don't get this !

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