Will advice recover from the post-FASEA exodus?

This article has been taken from the NMP education library which has now moved to Advisely

Having worked in finance and financial planning for over 30 years, the Story Wealth Management CEO has borne witness to multiple periods of upheaval in the advice industry – and, like her fellow travellers, has had to learn and change as a result. She believes it’s those experiences and lessons that have been one of the biggest casualties of the massive adviser exodus that began when FASEA commenced and continues to this day. 

Not just the numbers

“For our business,” she says, “the senior advisers all met the education requirements and all we had to do was the exam and the ethics unit. Associate advisers met the standards on the whole, even if some of their qualifications didn’t line up with the approved list – so, from a practical perspective, we’ve been fine.”

“However,” she continues, “I don’t know if there have been, or will be, enough people coming in to replace those who have left the industry. And even if there were, it’s not just about the numbers – it’s the experience we’ve lost as well. That’s much harder to replace.” 

Of course, Graham does see some benefits from a business perspective: “On paper, you could say it’s a good thing that some advisers have left, just because of basic supply and demand. That, coupled with the increasing demand for retirement planning, means the only challenge we’ve had recently is keeping up with the volume of work.” 

Pursuing growth

On the other hand, though, that volume of work introduces its own issues; Story Wealth, and other businesses like it, need to grow in response to increasing demand. And that’s difficult to do when experienced advisers are heading out the gates and new entrants are few and far between. 

“If we’re going to grow,” she says, “we need to attract new people to our practice. And that can be tough for a small business. Even things like the Professional Year – it’s probably a good system, but it requires structured supervision and the hours required can be prohibitive especially if you’re running the business.” 

Fortunately, Graham doesn’t see these challenges as having any impact on existing clients. In fact, few of them are even aware of what FASEA is: “They just don’t pay attention to it.”

She continues: “All they’re worried about is the relationship they have with their adviser – who their adviser is, whether they get on with them and what kind of service they want.”

Client experience

The only reforms over the past few years that Graham sees as directly impacting clients are those involving paperwork. “Our clients are generally pretty computer-literate,” she explains, “and they do tend to adapt well to change, but having to sign multiple fee consent forms can get pretty annoying for them. They just don’t see the value in it.

“There’s no consistency, either. Some of the forms allow you to use DocuSign while others require an ink signature.” 

It would appear that these issues are sufficiently widespread that they’ve gotten a nod in the recent Quality of Advice review proposals paper, which suggests a method for standardising the fee consent system. Graham is positive about this potential change, as she thinks it would facilitate a much more seamless client experience. 

“It’s really all about the client experience at the end of the day,” she says. “Anything that allows us to be more client-centric is a positive in my book.”