May 2020 Newsletter
You can count on us
In the last 12 months 5,025 financial advisers left the industry and 78 advisers joined the industry. That is a big difference and will likely get even worse in the next few years.
Why are so many advisers leaving?
Advisers will need to pass an exam to remain as financial advisers in the industry after December 31st 2020 (the current legislation) or December 31st 2021 (as per contested legislation in front of parliament).
To date only 6,500 or 28% of the current 23,000 advisers have passed this exam.
Advisers will also need to have a Graduate Diploma of Financial Planning, which is 2/3 of a Masters degree by either 2024 or 2026 to continue practising.
I have passed all of these exams, have completed all the educational requirements and am already fully qualified. However, it is not so easy for everyone and as you can see from the numbers, many advisers may not be around in less than two years and many more will be retired or working elsewhere by 2024 or 2026.
The reason? Until very recently it only needed a minimal amount of qualifications, which could be sometimes acquired in as little as a week or two, to qualify as a financial adviser, and even in this required training you could receive support from those who qualified earlier.
In other words previously qualifying to be a financial adviser was very easy and, so far, few advisers have qualified for all of the new, tougher requirements.
In addition, our compliance burden has roughly doubled in the last two years and there is legislation that will make it harder still to give advice.
So in essence here are some of the reasons why 5,025 advisers have left to date and it is very likely that many more will be departing:
a huge additional compliance burden with significant penalties
increased educational requirements on top of already increased workload
many advisers are close to retirement age and not equipped to deal with the above
the fact that all of the big banks are taking steps to get out of financial planning.
Why am I telling you all of this?
There is a tremendous need in Australia for managing your financial health better. During the current Covid-19 crisis clients of financial advisers made much better decisions than those without advisers, as just one example. These kind of decisions and support over time can make a tremendous difference to our finances.
We at In Your Interest are here for the long haul and are in fact expanding.
I personally love my work and plan to be here for another 20 years or more and we already have a second adviser with the beautiful Marian Rudeforth and a growing team.
If you would like to recommend us to a friend who has just lost their financial adviser or who wants a second opinion on their finances or who would like support, we would love to help your friends as well.
As always feel free to contact me with any questions.
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