UK’s loss of planners a lesson for Australia

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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.”

  • Matthew Ross on 22/10/2013 12:52:43 PM

    Well said Trev.

  • James Smith on 21/10/2013 9:56:35 AM

    How does Helmich expect scaled offerings to enhance client relationships ?? Doesn't he mean increase the account numbers of the super institutions ?? Given the level of professional standards and regulation that governs financial planners and protects consumers on the basis of personal relationships between clients and their advisers how will the super institutions govern scaled advice ? Decline in service standards and quality control is a far more significant concern than adviser numbers.

  • Matthew Ross on 19/10/2013 7:41:00 PM

    One reason for a drop in numbers is that when tens and thousands of endowment policy holders were mis-sold policies and complained, thousands of financial planners jumped at the chance to earn 400+ pounds a day as a contractor assessing the complaints.

    I know because I was there when it was happening; getting 20+ pounds an hour to do admin. The contractors were cleaning up...still are.

  • PETER CORRIE on 18/10/2013 6:04:14 PM

    Over regulation, too many controls and compliance in the UK and Australia are also responsible for the decline in adviser numbers. De regulation is the only real solution if you want substantial new adviser numbers.
    Education and ongoing training is important and always has been in the financial services industry but is only one part of the equation. It is all very well to have higher educational qualifications or even a Doctorate in financial/planning advice but if you don't have enterprise, business acumen, negotiating skills and last but not least salesmanship skills it is going to be very difficult to survive the business environment as a financial adviser especially when a lot of our dealings are with the general public.
    We unfortunately have people ie politicians and bureaucrats telling us the what why and how of financial advice also from people who have never been or likely to be financial advisers or have conveniently forgotten.

  • Big Trev on 22/10/2013 12:10:56 PM

    What a croc.
    Why is an unquialified senior employee of an Australian Fund Manager in Steve Helmich heading this up? This dilutes the relevance of the FPA

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