Hayes Knight chair Greg Hayes said there is an expectation that there is a fairly large group that will leave the industry before the requirements kick in because they are close to reaching retirement and the costs are unjustifiable.
“Alongside that, for the next two to two and a half years, it would seem that there will be very few new entrants in terms of advisers because nobody will be appropriately qualified,” said Mr Hayes.
“The only people that will be able to enter the industry post 1 January are people who have a financial services degree. Unless you actually have a financial services degree you actually can’t become authorised,” he said.
Mr Hayes said he expects that consequently, there will be a “significant reduction in the number of advisers who are [in the industry], and there will also be a period of two to two and a half years where there will be a relatively small number of new entrants into the industry”.
“For the people that are there on 1 January who are looking to have a long-term future in financial services advice, they certainly have an advantageous position over the next few years,” said Mr Hayes.
Mr Hayes said, based on the growth of the SMSF sector and some of the commentary that is being pushed out to the accounting industry about their service spread and avoiding being fully reliant on providing compliance services, this does seem to be a very natural area for accountants to be working in.
“I think what you will find is more firms getting quite actively involved rather than just sitting on the peripheral and becoming part of that advice solution for their clients in the SMSF space,” he said.
“We know that the rate of SMSFs is growing and the rate of SMSFs receiving advice is going so if you then go into an environment where there are fewer people advising those funds, the people that are in that space should benefit from increased demand and will be able to provide a more specialised service.”