Leading with resilience to shape a positive future for the financial advice industry

Sarah Abood Chief Executive Officer of Financial Advice Association (FAAA)

We spoke to Sarah Abood, Chief Executive Officer of Financial Advice Association (FAAA), about the unique value of financial advisers and how they can embrace the unfolding potential within the industry in 2024. The financial advice profession is currently experiencing a pivotal time of transformation, and with this there is a unique opportunity for the industry to grow and evolve. I am optimistic that 2024 will be the year we see more regulatory clarity and certainty about the provision of financial advice—from both advisers as well as the broader Australian community and those who can benefit from receiving advice. The reality is that the future will be shaped by the choices that advisers make and those who are seeking a career and joining the industry.

The demand for financial advice is currently strongly outstripping supply

Despite the rapidly escalating compliance burdens advisers are faced with, the resilience shown by those remaining in the industry has been extraordinary.

With only 15,664* practising advisers remaining, the ultimate ambition is that resilience will not be required in the ordinary course of business! There are many signs that concerns around regulatory complexities have been heard by Government and regulators, and tangible improvements are starting to be made.

Looking at the latest research by the Governance Institute of Australia in its Ethics Index 2023, consumers’ perceptions of the ethics of advisers continue to improve. In the last year, the Ethics Index recorded advisers increased by six points from 16 in 2022, to 21 in 2023. The positive trend in public perception suggests the profession’s efforts to enhance transparency, accountability, and ethical standards are gaining traction.

Ongoing efforts in educating advisers, maintaining strong and lasting client relationships, and fostering a culture of integrity will be essential in further enhancing the positive trajectory observed in the Ethics Index for the benefit of clients and the advice profession as a whole.

Clients are always the guiding light for advisers. If the advice given to clients is in their best interests, then advisers can be confident they are doing the right thing, and the practice will continue to grow over time. This will undoubtedly fuel the unprecedented surge in the demand for advice. By doing so, advisers can position themselves to not only meet the current demands but also thrive in a dynamic and evolving financial landscape.

A great time to be entering the financial advice profession

I feel so strongly and passionately that we need more great advisers in this country. Our financial system can be complicated for people to navigate on their own, so having someone you can trust to be on your side is invaluable.

The power of connecting students with great future employers and career mentors should not be overlooked. By providing the right education and support to meet the regulatory requirements, we can encourage more new entrants into the industry which means more people will have access to the quality advice they want and need.

It is incredibly important for us all to work together to help grow the profession, and we at the FAAA want to do all we can to help support new entrants.

As an example, through the TAL Risk Academy, Professional Year candidates can tailor a learning program to suit their needs, with four programs designed specifically to help advisers navigate the year.

Supporting awareness and training in personal risk insurance is a personal passion of mine, and I look forward to being involved as a presenter in the upcoming TAL Risk Academy course Better Together: harnessing opportunities in 2024.

We can expect to see positive and beneficial change

It is our expectation that this will be the year that details are worked out and meaningful and positive regulatory changes will be delivered.

Advisers who are across any industry changes and are focused on understanding how these can be embedded in their businesses for the benefit of their clients, achieving improvements in communications, service, and offerings, will only continue to thrive.

I am very excited to be part of this important profession at such an important turning point and am feeling very positive about the year to come.

*As at 25th January 2024. Source: Adviser Ratings