When the Hayne Royal Commission was completed, its recommendations were billed as a way to clean-up the industry, improve its professionalism and salvage the reputation of the financial advice sector.
These were notable aims after some less-than-palatable scenarios occurred in previous years but, several years on, the recommendations have had an unfortunate unintended consequence.
Yes, the industry is indeed more professional, its advisers are better educated and the quality of advice provided is higher.
However, a report by Forte Asset Solutions and adviser Philippa Hunt has highlighted the physical and mental toll that the recommendations have taken on the industry.
On the adviser side, this included higher stress levels, marriage breakdowns, depression, increased medication usage and poor sleep. On the business side, over a third said their cashflow had declined while others were spending less time with clients and increasing fees to cover costs.
In the worst-case scenario, 21% said they were contemplating self-harm. After the report was published, several Money Management readers got in touch to relate their own experiences regarding depression and self-harm.
We talk about the ‘light at the end of the tunnel’ approaching and how the changes have improved the industry but for many, the last few years may have been a change too far for them.
Advisers need to be supported, whether that’s by the Government, by the regulator, their licensee or professional organisations. This could be via counselling, support services, better communication and advocacy.
As well as the Quality of Advice Review, it would be worthwhile to conduct a peer-reviewed study on the effect of regulatory upheaval on the mental health of an industry, data that could be used for future legislative changes across the economy.
This will be the penultimate issue as Money Management will be ceasing print publication so look out for a special ‘farewell issue’ later this month.
