Lack of young advisers may leave businesses floundering
A severe lack of young advisers is threatening the future of the financial advice industry.
Wednesday, September 14th 2016, 6:00AM 
2 Comments
by Susan Edmunds
Dr Janine Scott
That’s according to Janine Scott, senior lecturer in financial planning and advice at Massey University.
She said New Zealand was lagging other countries when it came to succession planning for financial advice businesses.
“In the US, I do see more development in succession planning. There are even firms whose sole business is helping firms implement a succession plan. However, in New Zealand, it’s hard to tell what the situation is. But I get the impression from interacting with advisers that there is little, if any, planning. Most are consumed with combating present legislative challenges versus worrying or planning to pass on their business.”
She said most advisers around the world had built an advice practice rather than a business. “It’s less challenging to approach passing on a business but passing on a practice, not so easy. That’s why it makes sense that most will probably ‘die with their boots on’.”
New Zealand had a major problem due to its lack of young people joining the industry, she said.
“It’s not like in the US where there are over 100 university degree/certificate programmes teeming with students who are required to do internships and who have an easier transition into the financial planning profession. I think that in New Zealand, financial planning needs more marketing as a credible and viable profession. That’s hard to do without resources and support from industry participants and stakeholders. Universities can only do so much.”
She said many advisers were avoiding thinking about the future of their businesses.
“Just like talking about death with clients, I think it’s hard for many advisers to think and plan around succession. We would all like to believe that we’re invincible.”
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"Most are consumed with combating present legislative challenges....." - this only the regulators can answer.
"most advisers around the world had built an advice practice rather than a business...." - if it's financial planning then it's a practice. thought you should know this? sadly, many advisers don't even understand the concept.
"It’s not like in the US where there are over 100 university degree/certificate programmes teeming with students....." - only enough room for a handful of financial planners in nz and mkt not matured enough.
"I think it’s hard for many advisers to think and plan around succession. We would all like to believe that we’re invincible." - 1) like you mentioned, lack of young advisers - who to sell biz to, another retiring adviser? 2) regulators are taking advisers on a experimental ride - who knows the future? 3) besides playing field is lob-sided - which side would you take?
just my thoughts.