Instability and over-regulation in the industry have made financial advice a difficult career path to sell, according to Lifespan Financial Planning.
Eugene Ardino, Lifespan chief executive, said he was unsure if the industry was doing a good job at advertising itself.
“Not that we’re advertising there’s anything wrong with it, but I don’t know there’s enough,” Ardino said.
“But on the same token when you’ve got an industry that is as stressed as ours, who’d want to be advertising it?
“The incidence of mental ill health is off the charts in our community, so if you’re one of those people suffering are you really wanting to make an effort to bring more people in?”
Ardino said work needed to be done before it was possible to promote financial advice as a good career path to get into.
“There are issues in terms of we’re maybe not selling the industry as a career path well, but it’s a pretty difficult career path to sell because it’s incredibly unstable,” Ardino said.
“The rules change all the time, interpretations change all the time, and penalties for making mistakes are very tough. If you’re a young person looking for a career, there’s probably lots of other things out there that are more stable.
“There’s a lot of re-building to do before we can expect to see a high influx of new entrants which is a real shame.”
The loss of experienced advisers would also be an issue as newer entrants would be unable to take on the workload, without even taking into consideration there was not a sufficient supply of new entrants.
According to the Financial Adviser Standards and Ethics Authority (FASEA), there was 590 new entrants who had commenced their professional year since January 2019, as of September 2021.
Ardino said mature businesses had a higher capacity to be able to take on smaller clients at a loss because they had more profitable businesses.
“Newer entrants are going to struggle… newer advisers are looking to grow businesses from scratch or from lower or moderate bases and they’re really choosey about their clients,” Ardino said.
“It’s hard; the fixed costs of advice keep going up and the risks involved are very unforgiving if you make a mistake.
“The real focus is on making sure all your compliance is in order to an incredibly high degree and that costs money to do it properly.”