Australia’s largest accounting body, CPA Australia, has claimed a mass exodus of financial advisers could put many Australians’ retirement at risk and is calling for urgent action from the federal government to prevent the likelihood of this happening.
“More than 2.5 million Australians will retire in the next decade – and many will be shocked to discover there are fewer than 15,300 professional financial advisers to assist them with some of the biggest decisions of their lives,” CPA Australia superannuation lead Richard Webb noted.
“With the increasing propensity of retirees to leave their super funds and seek higher investment returns through risky investments, expert financial advice is needed now more than ever.”
CPA Australia noted the total number of financial advisers has fallen sharply from 26,500 in 2019 to its current level just above 15,000.
According to the accounting body, a “mountain of red tape” is a key contributor to financial advisers leaving the profession and it is urging the government to prioritise a review of the regulations and costs facing the industry.
Specifically, it wants Canberra to finalise several measures, such as the post-implementation review of the Compensation Scheme of Last Resort, the updated financial advice education standards, the changes to the financial advice best interest duty and the clarification of the role of the new class of adviser.
“The cumulative effect of the regulatory burden imposed on the profession in recent years has demoralised advisers to the point where many are now walking away from businesses they grew from the ground up,” Webb explained.
“The federal government must take action to help alleviate the burden of regulation and costs faced by advisers before the shortage becomes an irreversible crisis.”
Further, he pointed out superannuation funds’ ability to do more to help prepare their members for retirement by making appropriate advice solutions available will also be hindered by the reduction in practitioner numbers.
