With financial adviser numbers falling in the wake of the Federal Government’s Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the risk is that many Australians will miss out on financial advice altogether.
The events of the past few years mean that financial planners will have to work even harder to ensure Australians don’t miss out on the advice and assistance they need.
Many advisers are leaving the industry for various reasons, including education pressures, compliance burdens heightened by the Hayne Royal Commission, and the big banks closing down their financial advice arms in order to mitigate risk.
As a result, there’s extensive fragmentation of the financial advice industry, with many advisers seeking new licensees or getting their own license.
Even more concerning is the likelihood many Australian’s will miss out entirely on accessing quality financial advice. People will find it more difficult to get personalised financial advice, and with the cost of providing advice rising, it also poses a challenge for advisers to run viable businesses without passing the cost onto the client.
The complexity of the financial environment, including tax and superannuation rules, is also increasing, making it more necessary for people to seek professional help to ensure they fully understand their financial position and obligations.
Good financial advice covers a wide range of wealth issues – super, other investments, interaction with tax, estate planning, cashflow planning, insurance needs, debt management and retirement plans.
While there has been discussion in recent years about the use of technology, and the rise of robo-advice, this will unlikely fill the gap; financial advice requires empathy, understanding and intuition, traits which technology are unable to provide.
The challenge for advisers is to find a way to repair the trust that has been damaged following the Royal Commission and show Australians the value of the advice they’re able to provide. We believe that professional services firms, such as HLB Mann Judd, are well placed to meet the standards expected of financial services firms during the Royal Commission. There is no doubt that extra obligations will be placed on the provision of financial advice, and we welcome the increased professionalism that this will bring to the industry.