A meeting of the Financial Planning Standards Board at the FPA Congress yesterday gave Aussie planners a possible look into the future of the profession.
FPSB Council chairperson from the UK, Barry Horner, explained the current status of regulatory reform in the UK, saying that it might be a “heads up” for planners in Australia.
“Right at the heart of the retail distribution review was a desire from the UK regulatory point of view to see the profession come of age. What also came as a part of that change was a move to have a code of ethics…high levels of professional qualifications that everybody had to achieve, a move to a minimum requirement of continued professional development and everyone has to be a member of a professional body.”
Every practising planner in the UK also has to have a statement of professional standing, says Horner.
“What that’s lead to is a significant drop in adviser numbers in the UK, as you can imagine. There are many people that didn’t get through the exams, and we’re now in a period where, even those people that did get through the exams are now facing quite a different world.”
“Hopefully that’s a bit of a heads up.”
Horner says that adviser numbers dropped from 40,000 at the end of 2011, to 31,000 at the end of 2012. A 23% drop. The banks have suffered an even bigger loss, down 44%.
This has created a void in planning, and he questions how the “individual person of more modest means” can get access to good quality financial planning.
Also on the board was FPSB CEO Noel Maye from the US. He says that a possible solution to the gap is scaled advice, and that most people are coming to advice in that limited format.
“I think one of the challenges is…How do you get that level of care that would come from someone who’s actually giving you comprehensive advice?”
Australian FPSB chairperson Steve Helmich is “pretty bullish” about the potential for scaled advice.
“I think it’s just there to raise the awareness of the value of planning, and I think it’s going to be good for planning and good for the profession.
“If we can get good value for money scaled offerings…they’ll at least start to get a relationship with the client.”