A financial advisor’s job is to develop a plan and help you implement that plan over many years, so that you achieve your financial and lifestyle goals. This includes navigating the inevitable changes in your circumstances, markets, investments and so forth – knowing when to stick to the plan and when to alter it.
Achieving your financial and lifestyle goals is an incredibly valuable outcome. Therefore, it is very likely that financial advisory fees will be a small fraction of that value.
Just like in any profession, the best people are typically in high demand. Of course, when selecting an advisor, you definitely want the best that you can afford.
Shrinking pool of financial advisors
According to research house,
Rainmaker, approximately 30% (9,000) of financial advisors have left the industry since 2018. There are now less than 20,000 financial advisors in Australia.
There have been lots of legislative changes over this time that have prompted financial advisors to change careers or retire, including the banning of commissions, mandatory tertiary education standards(all financial advisors must pass a mandatory exam before 1 January 2022), increasing insurance costs and ever-increasing compliance obligations and so on.
The changes that have been implemented over the past few years have contributed towards lifting the bar (professionalism) for financial advisors. Of course, this is a good thing for the industry and its clients. But the result is that there is a growing shortage of financial advisors in Australia.
It’s the person, not that business that matters
A financial advisor and their client have a very personal relationship. This relationship is based on a high level of trust. Therefore, it is critical that clients find an advisor they feel comfortable with. Of course, there’s a personal/emotional element to this.
Second to
trust is
experience. Whilst it is possible to systemise some facets of the advice formulation process, what cannot be systemised or automated is
experience. Experience is one of the most important and valuable benefits a financial advisor must share with you. Knowledge tells you what to do and experience tells you when and how to execute. The challenge is that experience isn’t
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IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.
