Concern adviser numbers will fall

Strange comments, I know Newpark recruited over 100 brand new advisers into the industry in 2015 and runs 8 new adviser training camps p.a.” I am also aware PartnersLife has been very busy all year with its new adviser training courses.Dealer groups are recruiting, training and developing advisers and I’m sure dealer groups will support advisers in the new regulatory world when it comes.

Wayne may have a good point. There has already been some reduction in AFA numbers and mostly it would be from the small one person or two person business sections. The FMA publishes an AFA list periodically and some simple analysis shows that from March 2015 to November 2015 AFA numbers fell from 2004 to 1853 – 151 less. What we don’t know is what made them stop practicing. Was it the FMC Act and it’s messy DIMS outcome? What we can see is that the number of QFE or Corporate employed AFAs has increased marginally and the number of individual AFAs in practice by themselves or in smaller groups has diminished by about 190. Will the results of the review of the FAA have a similar affect? Who knows? We do know that any additional impost of time and money won’t help with the retention of our aging AFA population. The challenge for the industry (ex QFEs and Corporate entities) is how to put in place a successful business succession plan that doesn’t involve simply selling the clients to the highest bidder. If this is your succession plan then what will happen is that the QFEs and Corporates with the big cheque books will win again. If you want to sell your business to someone like yourself who will care for your clients as you do then a different approach is going to be the challenge. Those businesses with a succession plan, sound simple compliant processes and a strong client Wayne may have a good point. There has already been some reduction in AFA numbers and mostly it would be from the small one person or two person business sections. The FMA publishes an AFA list periodically and some simple analysis shows that from March 2015 to November 2015 AFA numbers fell from 2004 to 1853 – 151 less. What we don’t know is what made them stop practicing. Was it the FMC Act and it’s messy DIMS outcome? What we can see is that the number of QFE or Corporate employed AFAs has increased marginally and the number of individual AFAs in practice by themselves or in smaller groups has diminished by about 190. Will the results of the review of the FAA have a similar affect? Who knows? We do know that any additional impost of time and money won’t help with the retention of our aging AFA population. The challenge for the industry (ex QFEs and Corporate entities) is how to put in place a successful business succession plan that doesn’t involve simply selling the clients to the highest bidder. If this is your succession plan then what will happen is that the QFEs and Corporates with the big cheque books will win again. If you want to sell your business to someone like yourself who will care for your clients as you do then a different approach is going to be the challenge. Those businesses with a succession plan, sound simple compliant processes and a strong client centric attitude combined with a simple “How we Add Value” statement will be the winners. 2016 already looks to be an interesting and challenging year for all stakeholders. attitude combined with a simple “How we Add Value” statement will be the winners. 2016 already looks to be an interesting and challenging year for all stakeholders.

Popping a cat amongst the pigeons with Gavin’s commentary:

1. What if large financial institutions (traditional buyers and recruiters) determine that wealth management is not for them? Perhaps it stuffs their balance sheets, taking funds from higher geared alternatives? Perhaps it’s easier simply to flog their own products
2. What if the consumer objects to having their relationship sold – at least without their consent?
3. What if the smaller practices (aka independent) are the only ones able to provide non-aligned solutions?
I suspect that at least one of these will occur, in the face of rising Regulatory pressures and consumer sophistication.

BTW: The majority of the remaining AFAs (1,853 according to Gavin) appear to be doing just right