The head of the Financial Planning Association (FPA) would like to see adviser numbers exceed 28,000 within the next five years to keep up with consumer demand, she told Adviser Ratings.
The financial advice workforce reached its peak in 2019, before cascading by more than 12,000 in four years. As a result, it’s left tens of thousands of clients orphaned and many prospective clients with unmet advice needs.
FPA CEO Sarah Abood said that needs to change.
“I’d like to see many more qualified financial planners supporting Australians to improve their financial wellbeing,” she said.
Ms Abood acknowledged the pipeline of new entrants is still limited, with Adviser Ratings data showing just over 300 new advisers entered the profession last year.
To build the talent pool, Ms Abood said, the profession could get better at “articulating [the] benefits” to both young people and career-changers, including the flexibility a career in planning offers and the high demand for service.
“Sometimes I worry that we air a lot of the negatives and talk a lot about what needs to change in the profession, and forget to highlight what’s great about being a financial planner and why we’re here in the first place,” she said.
Regulatory change
In terms of what else is on Ms Abood’s wish list, she would like to see a “principles-based” approach to the regulation of financial advisers that recognises they are professionals.
“The most important change must be a reduction in the complex, overlapping and contradictory regulations, codes and rules that now govern the provision of financial advice,” she said.
Ms Abood noted the Quality of Advice Review – which was handed to Treasury on December 16 last year – could help achieve these changes.
She said adviser fees – which have increased by more than 40 per cent in three years – are a direct reflection of the costs associated with these complex regulations.
“These regulatory requirements continue to add to the time taken to provide advice, which is pushing up costs and making it more difficult for Australians to access the advice they need,” she said.
Merger update
In late 2022, the FPA and Association of Financial Advisers (AFA) began to more formally discuss merging the two peak bodies to present unified advocacy to Canberra.
Ms Abood said the response from members, in both webinars and face-to-face consultations, has been broadly positive and that each of the associations had been answering questions across several weeks.
She said members would soon have the opportunity to look at a draft constitution and consider a name for the newly formed organisation, should the merger go ahead.
Members will have the chance to vote on the proposal formally next month.
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