Australian financial planners were fatally wounded by the temptations of trailing commisions, feeder payments, complacency, tieups with lenders and a passion for margin loan based strategies and sheer over supply. Three quarters of the profession need to retrain for new careers because the party is well over. Based on their relationships with their clients over the past year some may have gained insight into the nature of suffering and the pitfalls of hubris, so for them, I suggest new work as monks and grief counsellors.
Agriculture for the rest so they gain insight into the real effort required for authentic growth.
FINANCIAL planners have lost 215,000 clients in the past year, according to a survey that paints a bleak picture for the beleaguered industry.
The Financial Planning Affection study by independent research group CoreData found an estimated 215,000 clients has deserted their planner over the past 12 months, pointing the blame mostly at the poor performance of their investments and the quality of advice from their planner.
CoreData partner Craig Phillips said another round of desertions was likely since the survey found almost a third of clients who still had "active ongoing advice relationships'' with planners said they were "very likely'' to cease using an adviser at all.
That was a marked deterioration from November, when only 4 per cent said they were considering the same action, and contradicted other recent surveys that suggested clients were mostly remaining loyal despite the plummeting value of their investment balances.
"Some clients exited the market soon after the downturn began, but the unfortunate thing we're now seeing is that large numbers of those who decided to wait and see have lost faith in the upside they can expect over the foreseeable future,'' Mr Phillips said.
"My guess is that when we visit this again in six months' time, we are going to see more and more people severing the relationship.''
The number of lost clients was not a net figure, but Mr Phillips said CoreData's research also showed there had been an overall drop in the number of Australians using a planner. About 5 million Australians use some sort of financial advice according to CoreData.
The financial planning industry has been under increasing pressure since the onset of the global financial crisis.
The main reasons cited by those in the survey for leaving their adviser were the level of financial return (73.4 per cent), quality of advice (72.6 per cent), and poor or infrequent communication (62.1 per cent).
http://www.news.com.au/business/money/story/0,25197,25412942-14327,00.html
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