At times it may feel that everything is getting harder but most of us continue moving forward and making good decisions, obtaining professional advice is no exception.

You may have seen the many recent media reports that many potential financial advice clients face the following market conditions and impediments (post changes made in the 2019 Royal Commission into banking and financial services):

  • There are 3,300 less financial advisers registered than 12 months ago, much more than that have left in the past 2-3 years!
  • After creating many of the issues addressed on the Royal Commission all the major banks have exited the profession leaving many previously advised clients without an adviser and/or looking for another.
  • According to a recent study, many consumers are falling into the hands of social media influencers and online alternatives, these are largely unregulated and potentially unqualified sources removing the protection and regulation that professional financial advisers provide.
  • The regulatory and industry changes have made it harder and more expensive for people to access financial advice.

Looking at the reasons why has this happened should give confidence to potential clients now that advice from a professional adviser is safer than it has ever been!

  • The post Royal Commission landscape is one where there is good intent behind the regulations that have passed, and they have had some good impacts e.g. requiring a best interest advice requirement and setting minimum educational and professional ongoing training requirements.
  • The advisers that remain are motivated and, in most cases, younger professionals who must run efficient and professional practices to compete and survive.

It is true that giving advice has become more complex and this has increased the cost of advice for the consumer.

  • Many commentators feel that from under regulation the profession has now hit over regulation. It has been reported that advisers must navigate four different laws and multiple regulators and complaints and dispute resolution bodies.
  • A professional adviser faces substantially increased fees for licensing and insurance alongside the normal business expenses in and rising inflation environment.

However despite this the need for advice remains higher than ever with:

  • Recent and substantial increases in personal wealth occurring in the past couple of years with rises in asset prices for both shares and property.
  • An environment of sea change with our aging population selling and downsizing, and similarly other younger people also making a change to work remotely and from home, there is a restructure of wealth.

So, clients and potential clients should take comfort that:

  • The remaining advisers are motivated and more professional than what was available historically!
  • Financial advisers have the necessary tools, experience, and qualifications to help you make the right decision when it comes to achieving your financial goals and are there to help you when life changing events occur.
  • Seeking professional advice as opposed to doing it yourself should provide you with a level of confidence as advisers are held accountable by law to correctly advise you.
  • Good advisers will keep you on track and proactively identify financial risks and opportunities along the way.

How you will benefit from financial advice:

  • Clients receive a review and then advice on how they can best achieve their goals. This could result in any or all of the following.
  1. Changes to their investments to achieve stated goals more efficiently.
  2. Changes to how their assets are structured to achieve various objectives like tax efficiency, asset protection or succession and estate planning.
  3. A clear pathway and direction via a wealth plan which is often accompanied with a projection of where they will get to if they follow the advice pathway.
  • Clients of financial adviser have access to ongoing advice and guidance; they are able to pivot when circumstances change and also address changes to the regulatory and investment markets etc.

Some recent media links for you to review:

ABC VIDEO: Strict regulations and high fees turning customers away from financial advisers

Forbes: Do I Need A Financial Advisor Or Should I Do It Myself? Here’s When It’s Worth It To Get A Financial Advisor.

Financial Review: 100,000 quit financial advice as fees jump another 8pc

General Advice warning: the information in this article is general in nature, it is not advice specific to your needs. If you want to act upon the information in this article, then you should seek advice from a qualified professional. VJC accepts no liability to any party for acting from this information unless they have sought advice in a formal engagement with VJC for this purpose.