Future Royal Commissions should consider the mental health impact of regulatory change and upheaval as the human impact on participants has been lost, according to clinical psychologist.
Max von Sabler had run his clinical practice, MVS Psychology Group, in Melbourne for eight years and said he had had treated numerous financial advisers during that time. He was also working on a PhD on the impact of change on professionals and how they could overcome that.
Advisers had been suffering acute stress disorders, post-traumatic stress disorder, insomnia and excessive drinking, among others, he said. This echoed a survey published last month that 80% of advisers had seen significantly increased stress levels since the Royal Commission.
“In these Royal Commissions, everyone is painted with the same brush and it’s all publicised in the media. That means the ethical, responsible people are left to bear that burden,” he said.
“[Advisers] have been completely overwhelmed by all these regulatory changes and are so exhausted by the end of it. Some are unable to sit the exam because they have been so unwell and overwhelmed by the whole process and that means they will lose their licence as a result.
“The human impact of all this has been lost and the media and politicians have a big role to play in that. There was a loss of confidence and demoralisation as people were being discredited so for doing their job.”
While the circumstances had improved somewhat since the Royal Commission concluded and as the deadline for the financial adviser exam approached, von Sabler said there was still a lot of resentment present.
“It’s not as acute in the media anymore, it was quite shocking for people when they were waking up and reading those stories about themselves. But the significance was so big that people are still getting over it, they probably haven’t realised the real impact yet and are in denial.”
He said there had been inadequate planning by the Government to consider the flow-on effects of the changes. This included the impact of advisers’ families, relationships and staff as well the cost of providing benefits for people who were no longer able to work. He also highlighted the adviser exodus meant they were fewer advisers around to provide advice on this insurance.
“For Government, they need to consider the downstream impact to an adviser and their mental health, particularly those who are doing a good job. I don’t think there’s been adequate planning and thinking about insurance and who is going to carry the burden of unwell people, if not insurance companies.
“It’ll be NDIS, which is already falling apart, it’ll be work cover, it’ll be Medicare.”
If you are affected by any issues in this story, contact Lifeline on 13 11 44 or Beyond Blue on 1300 22 4636.
Comments
100% correct. I was authorised for 10 years in bank licensee, then went to Dover , I've always done the right thing by my clients - yet the RC smashed me. I am only starting to realise how depressed i was back then. I drank more to cope, couldn't sleep, 50% revenue disappeared overnight when Dover shut down - most of the product providers together with ASIC threw us under the bus. Running a new small business and a young family, was the hardest time of my life. I am trying hard to get over it- time is the only thing that helped. Still angry at the government, ASIC & a few of the product providers who are now dealing with outflows, realising the advisers they treated so badly are actually the ones who deliver their products to investors
HI Been Around...so have i with the same Dover scenario...just starting to talk about it now, but Dan Murphy in our area loed me for a while. Frydenberg signed off the legislation saying no impact study required. Its had a huge impact on me. Good luck and best wishes
Yes, I was at Dover also...
Some providers refused to pay ongoing fees until they were satisfied there had been no break in our service... one taking about 5 months and putting our home in jeopardy.
Some providers refused to allow us to continue our authority with them (thereby retaining ongoing commissions on risk products).
Some just cut off our fees because they did not recognise our transfer of licensee.
etc...
It was absolutely disgusting. Every provider was looking to screw us using ASIC's "Why not litigate" premise as an excuse. The human reality was not important one bit. Shame on all of them.
While the last inept Gov was truly a sh*tshow, let's not forget that Labor not only forced the RC in the first place but then argued to FULLY implement EVERY recommendation from that idiotic delusional out-of -his-depth (and I even wonder at times if he was bribed), Hayne.
If Elbow and his new noobs have any chance of gaining credibility in our eyes, they'll have to reverse on every ISA/Union super initiative that has ever been created to destroy our profession. With the millions of cashflowing between unions/labour from their slush finds, sorry I mean member super funds, I can't see that happening, can you?
(Enter Richard Hedware with some lame comment supporting the 'pure, innocent, benevolent' industry funds or simply throwing mud on retail as his stock standard hum-drum, now old as 5 day dog sh*t, non-answer reply).
You are correct as I know some good friends who were, and some still are, financial planners and they did suffer in the aftermath of the Royal Commission. But to a person they say the Commission did cause the financial advice industry to raise standards and to become professional. For those still in business they say that business is good.
LMAO
you robot.
Push button get programmed reply.
Ah Dick Headware to the rescue.
As long as those rivers of Industry Super HIDDEN COMMISSIONS keep flowing for the Intra Fund Sales Advice all is good hey Dick.
Didn’t Industry Super spend 20 years crap canning Commissions ???
Now Industry Super are the biggest receivers of Commissions and they are the worst type as they are totally Hidden.
Not only Hidden Commissions but paid by every ISA member when the majority of Industry Super members get NO Servocr for the Hidden Commissions they pay.
What a hypocritical joke, laugh it all the way too the next RC DH, then get ready to pay it all back to the members once the rort is exposed.
Boom 100% !!!!
Yes. I suffered immensely under the royal commission. It saddens me that we were treated this way. Any form of bullying or harassment is never acceptable
It great to see this issue getting some air time, but in reality no one cares. The Lib government worked for the big banks/corporates, the ALP government works for its union fund masters. Advisers are seen as disposable by both, with a clear agenda to push all advice to their respective super fund allies. Fuel this with an incompetent and biased regulator, and lack of unity across the various representative bodies, advisers don't stand a chance.
Exactly right.
This is not the government recognising their failures and it will get no airplay.
Senator Hume said towards the election: "We knew we would lose a few advisers along the way", and I wouldn't have been surprised if it was not only the reduction in numbers, but that adviser suicides were also expected and considered acceptable.
Mental and human cost not considered? .... or was it considered and deemed acceptable?
That's what was criminal in my view.
Let's not forget that Treasury in their review of FoFA said they didn't care if there were job losses in this sector as other natural forces would take up the slack.
What a pity no one is listening.
Michelle Levy will deliver another catastrophic blow.
A lot of advisers in the industry naively think surely the next review will bring some relief but unfortunately all the new reviews just bring another blow. Blow after blow.
Just wait for the levy review she will be the biggest disappointment of all.
And Jane Hume has been promoted in the coalition to a more senior position; thankfully now in opposition though.
I'm still resentful, and I didn't have it that bad through it all.
Just have a long memory with this. Every time some new johnny come lately comes around to tell you what you should be doing for industry - remember. When some new special interest tries to sell a carve out - remember.
Remember the damage to us and ours when they want your help and feedback. Maintain the rage.
The problem is the people doing the review have no understanding whatsoever of the industry they are talking about. pity the industry participants have no voice at all. have you seen Levy's initial assessment? and comments they are very worrying indeed.
to call financial advice regulations a dog's breakfast ( Michael rice leading actuary) and a hot mess (Stephen jones current minister of financial services) is the understatements of the century.
but then again, virtually every sector in Australia is in disarray so we are hardly the only ones.
1. aged care - total collapse
2. medical doctors and nurses - total mess, doctors and nurses and paramedics are overworked and masses are leaving
3. energy - crisis
4. tax system - needs complete review and overhaul - total mess
5. foreign relations with biggest trading partner and the pacific - total mess and bordering on catastrophic
6. immigration policy - total mess
7. housing/ construction sector nationwide - total mess
name one sector that is working properly. nope, not a sector. how can this be? so while i feel sorry for myself every one else is also miserable to the same extent.
luckily China has decided they are not going to build a military base in the Solomons or else it was going to get really hot (i mean really hot) if you know what I mean.
so cheer up. it's not bad. it's very very bad everywhere.
Don't stand on the sidelines. Time for you to step up and become Prime Minister, particularly from your account, the previous one was no good.
news just in. KFC has run out of lettuce.
Go on Hedware, actually give us some depth of intellect. You have been sniping here for years and you are yet to show anything other than ideology.
no thanks. with the massive Australian property bubble about to come undone, and virtually every sector in tatters i'll stay quietly by in my harbourside office.
thanks but no thanks for the hot hot potato. you do it. you seem to have a lot of time to waste.
I think it a good idea
Through this whole sorry saga, I watched good and decent planners crumple under the weight of all the over-regulation, negative publicity and broken contracts thrown at them from all directions - from Licensees who were supposed to be loyal, from politicians who didn't have a clue what we even do, from the media just because it sold papers. Not one of them gave a thought in the world as to the huge mental damage being done to us. We survived through excess alcohol consumption, but many had to go on medication and under the care of psychologists, and some attempted self harm. Its traumatising for me to even recall those days and to meet up with my colleagues.
Good on you Laura for calling this out. Our attempts over the last 3 years have fallen on deaf ears. Sadly though I think this article will go the same way.....
While it is certainly true many advisers have been negatively impacted by regulatory changes, the Dover and AMPFP situations were a bit different. In both cases the key regulatory contributor to adviser harm was bad design of the existing licensing model. The "authorised representative" licensing arrangements create the illusion of control and certainty for advisers, when in reality all power and control rests with the licensee. The rug can be whisked from under advisers with minimal notice or compensation if the licensee gets into difficulty (eg Dover) or changes strategy (eg AMPFP).
The same sorts of disaster could befall any other authorised representative under any other licensee at any moment. The licensing model is one area where there has been no regulatory change, but there should be. The "authorised representative" role should be abolished entirely, with all advisers becoming either direct employees of a licence holder or self licensed. In the absence of regulatory change many advisers have started this transition themselves, and many more probably should. It will ensure they don't become the next victim of a Dover/AMPFP situation.
Add new comment