HLB Mann Judd head of wealth Michael Hutton believes a perfect storm of events, including the introduction of new education and professional standards under FASEA and the fallout of the royal commission, has contributed to a growing number of advisers leaving or looking to leave the industry.
“It’s both the best of times and the worst of times for financial advisers,” Mr Hutton said.
“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.
“The most unfortunate outcome of all this is that people will find it more difficult to get personalised financial advice.
“The silver lining to this is that, with fewer advisers around, those that embrace the new regime and do it well are likely to experience increased demand and see their practices grow.”
The number of accountants looking to exit the financial advice space has not been lost on the professional accounting bodies, with Chartered Accountants Australia and New Zealand, CPA Australia and the Institute of Public Accountants re-establishing the joint accounting bodies late last year to lobby against the current complex regulatory regime.
The tripartite lobbying effort comes as the bodies believe there is a ripe opportunity to persuade the government to listen because the industry is at the crossroads of change, with the review of the Tax Practitioners Board underway, the introduction of new FASEA requirements and the fallout of the banking royal commission.
Mr Hutton believes all this focus on the financial advice space could see further changes on the horizon.
“It has become a real fight on who can provide tax advice; can accountants provide advice on SMSFs, should there be a carve-out for accountants?” Mr Hutton said.
“We’re still wading through all of that and working out exactly what needs to be done to satisfy the requirements of ASIC, the Tax Practitioners Board and everyone else who is looking across this industry and it is quite an interesting time at the moment.
“Meanwhile, the complexity of the financial environment, including tax and superannuation rules, is also increasing, making it more necessary than ever for people to get professional help to ensure they fully understand their situation and make the most of it.
“Good financial advice covers a wide range of wealth issues — super, other investments, interaction with tax, estate planning, cash flow planning, insurance needs, debt management, retirement plans, interaction with Centrelink benefits and so on.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.