It was only a matter of time before one of the major banking groups opted to cut planner numbers. But if the cuts announced last week by ANZ were a manifestation of the global financial crisis, they were also indicative of the bank’s client demographic.
In confirming its decision to cut 10 per cent of its financial planning roles, representing 58 employees, ANZ attributed the move to “a significant drop in demand for investment advice”.
The banking group said it had tried to sustain planner numbers for some time in the face of the downturn, but it was now clear that the changed investor behaviour appeared likely to last for some time and that it had been left with no choice but to reduce the size of its planner group.
Few dealer group heads or financial planning principals would have been surprised by ANZ’s announcement. By now they should be acutely aware of the fact that while long-term, well-heeled clients are staying the course, many less well-heeled mum and dad investors have been scared off.
What should be of concern to the industry, however, is the fact that the banks boast well-established retail networks that act as broad catchments for their wealth management products.
If the banks are doing it tough, dealer groups founded on high planner numbers servicing relatively modest funds under advice must really be feeling the pinch.
It is in these circumstances that further planner retrenchments are probably inevitable across the industry but, equally, we can be sure that planning firms will be doing their utmost to retain their best and brightest in the knowledge that they will need to be appropriately positioned for the inevitable recovery.
Less than a year ago, Money Management was still carrying stories about the shortage of financial planners. Circumstances have clearly changed, but the industry will need to be careful that it does not emerge from the global financial crisis only to be confronted by a skills shortage.
— Mike Taylor
