Advisers and professional bodies are “doing a good job” at promoting financial advice but need to repair the industry’s reputation if they want to encourage more people to join the profession.
Speaking to Money Management, Kirsten Macdonald, program director for commerce at Griffith Business School, highlighted how people were unaware of the roles or benefits of the financial advice profession.
This was a problem when there were many advisers opting to leave the industry in light of the changing regulatory requirements but few were joining to replace them.
“It is hard for students or career changers to know about financial advice and they might be getting information from people like their parents who don’t understand it.
“Advisers and professional bodies are doing a good job at getting the message out but the trouble is they are up against all the regulatory reform and the colossal advice failures which were highlighted by the Royal Commission. Every industry will have bad apples but the bad ones in financial advice were on show.
“The industry should demonstrate how it has changed with things such as the Code of Ethics and start to repair its reputation.”
She said she had seen many people move to financial advice from professions such as teaching or nursing who were good at nurturing relationships and empathy and from engineering as they were analytical and good with numbers.
She commented the recent pandemic led many people to re-seek financial advice again in order to deal with the market volatility which was an encouraging sign. However, there were insufficient advisers to deal with them which led to them being turned away at a critical moment.
“The pandemic was a trigger for a lot of people including those who might have had advice in the past but wanted to return. Unfortunately, the advisers said they were busy with their existing clients so had to turn them down,” she said.
“It was especially difficult due to the lockdown as advisers said it was hard to onboard a new client over Zoom and build a relationship and those who took on new clients said it was an emotional time.”