One in four will leave industry, says Radar Results
A poll conducted by Radar Results has confirmed other industry research about negative financial planner attitudes following the announcement of the Future of Financial Advice reforms last week.
In response to the question 'How will Chris Bowen's new laws (July 2012) affect your business plans?', more than one in four respondents said they were considering retiring sooner or leaving the financial planning industry.
"I personally wasn't expecting it to be quite that high," said Radar Results' group operations manager, Michele Conroy.
The poll received 732 responses, with more than half suggesting their business plans would be affected by the proposed reforms.
Some 12 per cent (87 respondents) said they would retire sooner, 14 per cent (101) said they would sell part or all of their business, and 16 per cent (115) said they would leave the industry. Some 44 per cent (324) would not change their business plans as a result of the reforms.
Conroy said the high number of people seeking to leave the industry would exacerbate the skills shortage.
"It seems that a lot of employees will be leaving the industry and doing something else," she said. "I don't know why they would leave - maybe they think there's not as great an opportunity to move into their own business later on because of these new reforms."
Conroy said the statistics were a surprise because her impression was that a lot of younger planners were generally supportive of reforms that would move the industry away from commissions.
She said she was also surprised by the differences in opinion around what effect these reforms would have on the value of practices. Conroy said some felt those practices that still operated under commissions would see the value of their property increase, while others believe value would drop and think this as an opportunity to expand by picking up commission-based businesses. Some 14 per cent of respondents (105) said they would expand through acquisitions.
"I haven't had any positive comments at all, except from people who think their commission-based practices are going to be worth a lot more money," Conroy said.
"It's very surprising how people in the industry can have such different views on it."
Conroy conceded that this might be due to confusion or a lack of knowledge around the proposed reforms as many financial planners did not know where to go to read the reforms paper. She said many did not realise that the changes were not retrospective, and were concerned that the ban would impact their revenues and terms of sale.
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