New research into financial adviser sentiment has shown a lower number of practitioners than expected are looking to exit the industry as a result of the financial services royal commission recommendations and new educational requirements.
The Investment Trends “2019 Licensee Satisfaction Report” revealed 11 per cent of advisers surveyed said they intended to leave the industry if the full recommendations from the royal commission are implemented, while another 7 per cent expressed their intention to stop providing financial advice once the Financial Adviser Standards and Ethics Authority (FASEA) educational requirements take full effect in 2024.
The study showed technology will be the element most advisers will turn to when having to adapt their businesses as a result of the implementation of the royal commission recommendations, with 69 per cent of respondents saying this is the direction they will favour.
“By using technology more effectively, planners believe they can enrich their client engagement capabilities, helping them better demonstrate value to existing clients and to expand their pool of potential clients,” Investment Trends research director Recep Peker said.
Self-licensing among advisers has also significantly increased, according to the report, with 24 per cent of those surveyed indicating they are already operating under their own licence or are an authorised representative of a boutique licensee. This compares to 15 per cent of advisers who were operating in this manner five years ago.
Despite the rise in popularity of self-licensing, the appeal of belonging to a large licensee continues among the majority of advisers, with the report showing 55 per cent of respondents intend to remain with their existing dealer group and another 10 per cent saying they are looking to switch to another dealer group within the next year.
“Dealer groups remain the backbone of the financial planning industry and many planners believe that the support, guidance and services provided by their dealer group outweigh the self-licensed model,” Peker said.
“Still, dealer groups can do more to support their network of financial planners. Among those who are part of a dealer group, nine in 10 (91 per cent) seek further assistance from their dealer group – from support with lifting back-office efficiency to ongoing client engagement.”
The effect of the FASEA changes had also previously been downplayed by certain parts of the financial services industry.
The research for the report was concluded in May and processed responses from 1030 financial planners.
