Connect Financial Service Brokers chief executive Paul Tynan gave financial advisers at the Association of Financial Advisers' National Conference some food for thought on succession planning and the state of the industry.
Reflecting on the last 12 months, Tynan told advisers: "We had a Royal Commission that was nothing about advice but you are dealing with the consequences."
He was particularly critical of the Royal Commission's view on adviser's commissions.
"Commissions are all about affordability. Commissions were developed because consumers couldn't afford it or didn't want to pay. It's got nothing to do with conflicted remuneration," Tynan said.
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"Financial planners have long term KPIs, they are the only ones aligned to the client long term."
With all this in mind, Tynan said succession planning is going to become more difficult going forward.
"Politicians don't realise that most advisers are small business owners. Your business is your super," he said.
This is why succession planning is so important for financial advisers, he said, adding that succession planning is all about getting the right outcomes for advice practice owners, their clients and their families.
"No one teaches you how to be business owners, FASEA doesn't," Tynan said.
"You've got to be flexible when it comes to succession. The road looks like it's straight but once you start driving there are twists and turns."
He shared some case studies of clients he has worked with to develop an effective succession plan.
One of the studies involved an adviser in his 60s who didn't want to go back to study to meet the FASEA requirements. The business was sold to someone who was a suitable match to the culture of the firm and the adviser was retained as a relationship manager.
"As a relationship manager you can do everything with a client except advise on product and investments. I tell everyone who is worried about the FASEA requirements, look at that route," Tynan said.