Economics will solve adviser supply issue
Economics will eventually solve the adviser supply issue, but the issue will not solve itself quickly, according to Centrepoint Alliance.
Centrepoint Alliance advice group executive, Paul Cullen, said the adviser supply issue would take time until financial advice became a profession as that would attract people who want to make a career out of it.
“The economics will be there so ultimately the market will respond to that. There will be more people that at advice as being a profession and see it as a career that to aspire to,” he said.
“But in the short run, it is difficult because there aren’t that many graduates coming out who think that financial advice is the career for them.”
Cullen said there were still advisers “spilling” out of superannuation funds, and banks who were looking for roles and that his firm tried to place those people in their practices.
“That's still a source but once that dries up it will be incumbent on everybody that's left to try and attract, and promote advice as a career,” he said.
“Because in the absence of that is just not going to be that many entering. The UK went through that cycle and that cycle is playing out here now.
“But economics has got a great way of solving things – a free market where people can make a good living, and make a big difference to clients. It's a profession and eventually the economics will solve the supplies issue.”
Cullen noted that there would be lag as even if people today were interested in getting into the industry they would need to complete a relevant degree, sit the Financial Adviser Standards and Ethics Authority (FASEA) exam, and then go through the professional year.
“You've got to get the EQ stuff right, as well as the IQ stuff. And that's just working in a practice and being coached and mentored by a good adviser to be able to deal with clients and do all sorts of work that goes around an office. And so, there's a lag,” he said.
Recommended for you
ASIC data shows the number of smaller AFSLs with less than $50 million in revenue has increased by 25 per cent in the past year, but the regulator believes they are still under reporting breaches.
Former financial adviser and Coalition backbencher Bert van Manen has introduced a bill in Parliament, building on Michelle Levy’s good advice duty and calling for SOAs to be scrapped.
Following its recent partnership with Otivo, Colonial First State has now announced an arrangement with Viridian Advisory to offer unadvised members with one-off, topic-based financial advice.
Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand.
