The future viability of the financial advice sector is literally at the precipice meaning that politicians and stakeholders will need to be careful not to compound or repeat the decisions of the past, according to a financial planning practice broker.
Connect Financial Services Brokers chief executive, Paul Tynan, said practitioner numbers were at an all-time low, exits and premature retirements continued to mount and the industry’s reputation and obsession with over-regulation was dissuading new advice entrants.
“It’s for this reason, that politicians and stakeholders must ensure that the decisions of the past that has brought about this scenario are not repeated or compounded going forward,” he said.
Tynan claimed the biggest mistake had been efforts by Governments and regulators to change the past retrospectively and he said this applied to education, remuneration and so-called “lookbacks” applied by the Australian Securities and Investments Commission (ASIC).
“In all seriousness, no industry should be required to operate under a lookback regime of ten years or more. Imagine if politicians or the legal profession was required to adhere to the same requirements,” he said.
Tynan suggested that a combined effort and joint approach by Government could halt the demise of the financial service and advice sector but that a united effort was needed.
“A good start would be a bipartisan working group NOT comprised of the usual retired judges, lawyers, vocal interest groups and individuals who have no practical experience running an advice business or face-to-face interaction with clients,” he said. “It’s for this reason that Australia has a track record of royal commissions and industry reviews failure.”
“There are many quality advisers who genuinely care about the industry and ensuring consumers receive quality advice and service that would gladly participate in a genuine and inclusive bipartisan review,” he said.
Tynan also suggested giving national priority to financial literacy among Australians.
