Industry reform has left financial advisers’ financial and mental health nothing short of “catastrophic” and these consequences need to be documented, according to the United Financial Advisers Association (UFAA).
The UFAA said documenting mental health issues could give context for legislators and industry associations to better understand the human consequences of future reform.
UFAA chair, Alex Vagliviello, said the legacy of constant change had included industry rationalisation, less competition, reputational damage, decimation of advice business values, exit of advisers and advice becoming unaffordable.
“The damage done to the sector in terms of advisers that have left the industry and their financial and mental health has been nothing short of catastrophic,” Vagliviello said.
“However, there still exists a tiny slither of time in which to bring the situation back from the brink – especially in the current environment where the services of experienced practitioners have never been so needed by so many people and businesses in financial distress. Losing advisers now would be no different to losing doctors in the face of a pandemic.”
Former adviser and industry advocate, Barry J Daniels, said one of the most disappointing aspects of reform was that the government and the industry were not acknowledging and addressing the mental health issues advisers were facing.
“Advisers are literally fatigued and the prospects of further reform the final straws – especially for mature age advisers,” he said.
“Incessant reform brought about the perfect storm that was further escalated with the demise of practice resale values and buyer of last resort arrangements that were supposed to fund retirement aspirations.
“Is it any wonder that once resilient individuals simply find themselves unable to cope?”
He noted that there was also angst from advisers with significant borrowings that funded the purchase of practices/books of clients to underpin business growth plans and provide continuity of service to clients of the acquired businesses.
“Moreover, constant tinkering with remuneration structures has seen value of practices plummet and the unjust vilification of all advisers for the sins of the few has added to distress. These factors are deterring the next generation from considering a career in advice, further jeopardising the viability of the sector,” Vagliviello said.
“Hence the need for these to be documented and put into context before embarking on further change.”
