EDITORIAL

The advice world is changing

There are already discernible changes in financial advice in the three months since the Financial Services Legislation Amendment Act finally kicked into action.

One of the most obvious is advisers are leaving the industry. Figures from the Companies Office show that hundreds of financial advisers face deregistration.

Added to that there is growing evidence that many advisers are selling their businesses or simply putting up the shutters. This seems to be especially so in the life insurance sector.

The old timers just don’t have any appetite to deal with the additional compliance regime and level five papers which will be mandatory in the future.

This also creates opportunities for new entrants into the market. It was interesting to hear Naomi Ballantyne say on Good Returns TV that four of Partners Life’s business development managers were leaving to become advisers.

One of the likely outcomes of regulation is that some consolidation will come to the financial advice industry and businesses will have more scale. No longer will advice be seen as a bit of a cottage industry.

One of the most worrying observations is the impact change is having on the mental health of advisers.

Research out of Australia shows regulatory and compliance demands have put a huge amount of stress onto advisers.

The numbers are scary. It says 73% of advisers are experiencing high levels of burnout from work and 33% of advisers are seeking medical care to manage their health symptoms caused by the stress of the role.

The report, through, does say there are a group of advisers who are thriving and it gives some really useful tips for advisers, the industry and regulators about how to manage the wellbeing of advisers.

AIA, which supported the research, plans to undertake the exercise in New Zealand. You can find out more about it on Good Returns TV (www.goodreturns. co.nz/grtv).

Coming of age

At the time ASSET went to print Mindful Money held its first ethical investing awards. We will have more on this event in the next issue, but congratulations to all the winners and finalists.

The event held in Auckland was a sold out affair and it clearly demonstrated that responsible investing has finally come of age in New Zealand.

This can be seen as more and more product enters the market. On pages 16 and 17 we feature a suite of new sustainable funds.

Philip Macalister

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ISSN 1175-9585