Seeing the Business from an Australian Perspective

In 2017, the Australian government launched the Banking Royal Commission, which targeted the banking, superannuation and financial services industries. The commission, which was established to investigate and report on any wrongdoing in those industries, shockingly found that many customers were being charged fees for financial advice or other services that they were completely unaware of. These findings surely didn’t apply to all banks or financial advisors in Australia, but enough compelling instances of corruption were brought to light that the entire industry was cast into chaos.

As a consequence of the findings, millions of dollars (AUD) are in the process of being returned to consumers, and banks’ reputations have been seriously damaged. In a move to salvage what remains of their reputations, many banks intend to or already have discontinued their financial services divisions. This is bad news for the many Australian financial advisors who were previously linked to banks.

A Shifting Landscape for Advisors

Financial planning in Australia is undergoing a transition, during which it resembles a profession more than an industry. When I started out in this field, there were roughly 26,000 advisors in Australia, but that number is now down to around 15,000 and still decreasing. But that doesn’t mean that our field is shackled from restoring its reputation. Despite the hit our profession has taken because of the new regulations, the demand for our services remains as high as ever, because consumers still seek our guidance.

With the influx of new clients in Australia resulting from the sudden shortage of advisors, it is important to manage your practice efficiently. One of the ways I do this at my own practice is by continuing to develop and improve my value proposition, breaking down each service I offer my clients and the associated costs transparently. Not only is this the right thing to do, but it is also an important exercise in building – or, in the case of new clients who were misled by past advisors — restoring trust in the process. As a result, my practice is busier than ever. What’s more, limited travel over the past two years due to the pandemic has provided further opportunity to focus on refining my business during an otherwise unfortunate global event.

Although new regulations and the pandemic have introduced new challenges, they present room for growth. During this time, I encourage any Australian advisor looking to advance their career to commit to their studies if they intend to become an independent advisor, develop their fee structure and build a concrete understanding of their value proposition. I’ve found that applying a renewed effort to clearing these hurdles has not only been extremely rewarding, but it’s brought me newfound success too. This can be the case for any advisor who is willing to apply a similar approach.

Renewed Commitment to Clients

For all the new regulations imposed on Australian financial advisors by the Financial Adviser Standards and Ethics Authority (FASEA) and other governing bodies, and the challenges that come with them, I can confidently say that I still find my career as rewarding as ever. The root of what we do and why we do it is our clients. Our clients in Australia may not be as privy to the exact details of the new compliance measures placed on financial advisors as those of us in the profession are. However, we can still use this transition as an opportunity to be forthcoming with our clients about what exactly we are doing for them and how our services will benefit them, not only to reinforce our personal commitment, but also to help mend the reputation of our profession. With transparency and trust baked into the process from the outset, we can rebuild the foundation between advisors and clients in Australia that once threatened to crumble.

It is unfortunate to see so many of my Australian colleagues choose to move on from this profession, whether to shift their career path or retire altogether. But we must move forward in a way that demonstrates our best intentions for the people we serve. Our clients deserve financial professionals who care about their wellbeing – not just the wellbeing of their portfolio. Deeply caring for people is a principle that has driven my career from its outset, a principle I find is shared with my fellow colleagues and – most importantly – it is a guiding principle for life.

Brad Isaac, ADFS, is a 13-year MDRT member with 11 Court of the Table and two Top of the Table honors. He runs his boutique practice, Finstyle Planning Solutions, in Abbotsford, Victoria, Australia. With over two decades of financial planning experience, Brad is passionate about helping his clients create and protect the lifestyles they want.