FSC CEO Richard Klipin unveiled the new research entitled, “Unlocking the Potential of Professional Financial Advice” at the FSC: Get In Shape events this week.
The research shows that the financial advice sector has remained resilient despite the challenges of Covid and regulatory change while continuing to provide ongoing value to Kiwis.
The FSC research committee asked the advice community three questions.
1. How do you feel on the other side of Covid?
2. How ready are you for upcoming regulation changes?
3. What is your outlook for the future?
Klipin said that the conclusion of the research was that “We are in a huge moment of change. We are moving towards the much more level footing of an advice-led [rather than a sales-led] conversation.
“Because of this, business models, remuneration models, how advisers connect with their clients are all going to change. It feels like this moment is unleashing an incredible opportunity for the industry.”
As well as reaffirming previous research that highlighted the benefits of financial advice during times of turmoil, the research also showed that advisers were feeling that they could weather the post-Covid storm.
“What we saw in Covid was a change in how people operated their businesses. The key change in this sector has been the pick up and the take up of technology.
“This powerful take up of technology puts advisers in a powerful position moving forward.”
When looking at how ready advisers are for regulation change the numbers are looking even more positive.
“At the end of last year, 57.5% of advisers said that [they] have continued to ready themselves to implement the required changes in FSLAA, 32% said they will be ready when it begins.
“This notion in some parts of the sector [that some are] wondering how ready are people? How many people are out there not doing anything? This data says that most advisers are well down the track.”
According to the research most advisers have a positive outlook for the future. Many of the respondents felt that the incoming regulation changes are positive for customers, and for advisers both.
One less positive issue that was raised in the research is what Klipin called a “demographic time bomb”.
“As a tribe, financial services are getting older. Some of the data that came through showed that people were thinking [about] when they were going to up sticks and grow avocados.
“In our sector there are a lot of people five years out from that point. If only 18% of New Zealanders get advice, but 35% say they want or would consider it, where are all the people who are going to look after them?
“In the report we call that a demographic time bomb.”
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