In recent months, we’ve gone through the interesting exercise of cleaning out what we call the No More Practice Vault. That is, looking at all the shows we have produced, from way back in the beginning, and how the advice community, and the challenges advisers face, have changed.
And I have to say, even we were shocked. From the Cooper review, to uncertainty around what was considered a commission payment, it’s obvious from our archive (which we’ll continue to add to) that advisers, more than most other small business owners in Australia, have undergone massive changes to their business models.
And it appears that it’s not over yet. It seems that there is still uncertainty around what a good advice practice is worth. Valuations have varied widely compared, to eight to nine years ago and there are no doubt more practices for sale now than there were then.
There is also less appetite from large licensees. As they grapple with increased regulation costs and changing revenue models, their ability to voraciously buy distribution has decreased dramatically.
We’ve also experienced a tussle over what is considered to be truly independent. Many practices rely on commissions from insurance clients to survive, and the uncertainty in this space is set to continue.
It’s tough to run a successful business when you are constantly going through a period of self-assessment and strategic transformation. I congratulate so many of you who have done this well, and sympathise with how hard and stressful this must have been.
I also know from looking at the data, that unless we have more advisers, with the right business models, who can take on clients en masse, Australians will be in a lot of trouble in the coming years.
The ageing population; changes to super; housing affordability, and stagnant wage environment; mean that more than ever, advisers will be the last frontier, and the only chance most Australians have of planning ahead and enjoying a comfortable retirement.
More than ever, advisers are needed. Less than ever, people are celebrating the industry, and promoting the good it does.
I am constantly surprised at how many advisers tell me they ‘fell into’ financial advice. The industry is still developing clear pathways and desire for the profession to get more talent into it. There are great programs happening, like Grad Mentor to encourage this, but still not enough done to get the best talent into the game, to prepare for the next 20-30 years of desperate demand for good financial advice.
Those who have read my blogs know I don’t like to end on a negative, of course there are always solutions, and our industry continues to deal with change and keep moving forward.
But it’s worth acknowledging it’s not easy, and also that just staying in business in this environment, and continuing to offer clients quality advice, is no small feat.
So well done. Keep going!
You are more important than most.
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