If there is one thing that 2020 taught us, it is that we simply cannot predict what is around the next corner. Now is the time to protect your assets and have a rock-solid plan for any eventuality.
2020 proved to be a tricky year to be a financial adviser in more ways than one. Quite aside from the uncertainty and volatility that Covid presented, recent developments in regulation impacted the way advisers are able to operate.
Between FASEA compliance, best practice and a host of additional regulatory mandates, many advisers profess to only having 15% of their time allocated to actually engaging with their clients.
A Risk Adviser and now a member of AFAN, Paul Herring, posed the very timely question, what are the options for life risk specialists looking at 2021 and beyond as it appears there is no ‘one size-fits-all’ solution.
Here, AFAN’s Founder, Craig Ball, outlines some your options as he sees them:
- Get out now. This may seem a little dramatic, but it is what some will do when they find the regulatory commitments too onerous. It’s not a great option for either the good advisers or their clients. But if you can’t adapt to the changing face of the industry, it might be the only option you have!
- A second and better option is to successfully complete the FASEA exam. For the relatively small amount of $540 + GST, you can assess your knowledge and competency in the current environment. Quite aside from assessing your ability to perform the role, it gives you additional credibility and ultimately provides some confidence for your clients. When you start your graduate diploma in financial advisory, you have only four years to complete it, but if you add successful FASEA exam to your retinue, you add an additional five years of eligibility to your diploma.
- A third option is succession planning. Bringing someone young, qualified and hungry into a role, who can learn from you, arms you with the necessary qualifications and skills in the regulatory arena, leaving you to actively engage with the business of clients advisory. The risk is, of course, they learn from you and move on, leaving you back at square one and potentially taking clients with them.
- A few risk advisors I know are heading down a general advice model. This takes away the need to have the qualifications and meet compliance obligations. It’s high risk, doesn’t really set you up for long-term success and, potentially, leaves the door wide open for litigation.
- Option number five makes by far the most sense to me. Join an industry group. Something like AFAN. Essentially, we, and groups like us, are co-ops; a bringing together of like-minded professionals, with different and complementary areas of specialisation. At AFAN we have a range of degree qualified practitioners for you to draw on, allowing you to continue to do your business, safe in the knowledge that there are specialists advising the advisers. As with all business, relationships are key. People buy from people. Being a part of a group like AFAN helps you ensure you keep your existing relationships while benefitting from the strong relationships forged by others in the industry. It’s a win, win.