Financial Planners Feel Under Attack

Planners feel under attack

29 April 2009 | by Amal Awad and Lucinda Beaman

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Some financial planners are feeling increasingly despondent, and some are feeling let down by their dealer groups and the industry in general – a situation which is leading planners to reassess their business models.

Wealth Insights managing director Vanessa McMahon said her latest research shows that planner sentiment has fallen to new lows, with 38 per cent of planners having a negative outlook compared to 12 per cent last year. This is on the back of most practices reporting a “serious drop in revenue and profit”, McMahon said.

“Some are running at a loss, and most smaller practices don’t have much fat to cut out of their businesses but have the same expenses, including dealer group costs."

At the same time, some financial planners are expressing disappointment with dealer groups, feeling that they are not receiving additional help, McMahon said.

McMahon said planners are “doing it tough”, facing the pressures of lost income, dealing with clients who have lost money and a sense of being over-regulated. Some planners also feel they have no back-up from the industry and feel under attack, McMahon said.

Financial Planning Association chief Jo-Anne Bloch said adviser sentiment in the US is also very low, while countries such as Japan and Ireland face serious problems.

“If you think things are bad here, [it’s nothing] compared to what's happening around the world,” Bloch said.

“Our research is echoing what Vanessa McMahon is saying: [there is] real anxiety among our membership,” Bloch said.

“There are some real issues and certainly we need to acknowledge that.”

Bloch said financial planners seem to be “fair game” and “under attack” by self-interested, sectional groups.

Bloch said some planners are now looking at different business models and how they might better manage their costs and run their businesses.

However, McMahon did note that well-established practices and those with strong referral services were generally doing well.