Human impact of RC lost on Government
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.
AUTHOR
Laura Dew
Recommended for you
The corporate regulator has cancelled the AFSL of a Perth advice firm, with the firm having previously seen its licence temporarily suspended in 2020.
Having proposed changes earlier this year, ASIC has clarified how it will support licensees with additional relief under the reportable situations regime.
AMP has partnered with BlackRock and research house Lonsec to provide a model portfolio capability on its North platform that offers “portfolio customisation at scale” to advice practices of all sizes.
Money Management rounds up actions ASIC took against advice individuals in the first half for FY25 from exam falsifications to dishonest conduct.
