Financial advice is becoming an elitist service as it is now only affordable to a minority of Australians, according to Connect Financial Service Brokers.
The firm’s chief executive, Paul Tynan, said this had been exacerbated by the regulatory environment disallowing advice to be scalable.
“The big end of town (major banks, AMP and private banks) are moving away from retail advice as red tape and over regulation smothers the advice process,” he said.
Also, he said, advisers were leaving the industry and left remaining practitioners no option but to restructure their business models and only service those clients who could afford advice.
Tynan noted the regulators including the Financial Adviser Standards and Ethics Authority (FASEA) should not get to comfortable as their self-fund models would come under pressure “as institutions that unpin their operations are leaving retail advice”.
“The end result being new advisers entering the industry over the next decade will be a scarce commodity and planning practices seeking to grow will struggle to attract new talent,” he said.
He pointed to a recruitment firm that said new jobs were only attracting between two and eight applications while advice remediation attracted up to 300 candidates, suggesting planners preferred institutional jobs over self-employment that was riddled with over-regulation.