[GRTV] What's driving adviser burnout?

Fifteen years of constant change has worn financial advisers down to the point where more than 70% of Australians in the industry were reaching the point of burnout, and we want to know what's happening here.

Thursday, September 23rd 2021, 6:06AM 4 Comments

That's the message from Dr Adam Fraser, founder of The e-lab, who along with Dr John Molineux, helped by sponsorship from AIA NZ, are conducting the first industry-wide study into the mental wellbeing of Kiwi financial advisers.

AIA NZ's chief partnership insurance officer Sam Tremethick and Dr Fraser sat down with Good Returns' Philip Macalister to discuss the New Zealand Adviser Wellbeing Research project.

Fraser says he was asked by Australian financial advisers to conduct a survey of the profession due to a spike in adviser suicides.

"These people actually pleaded with me, these were 50-year-old males who don't often ask for help or become that vulnerable."

What the research found was "pretty confronting," says Fraser.

"For 25 years we've been studying different roles.

"We've looked at home loan lenders, teachers, paramedics, executives, emergency room staff in hospitals...and in comparison [financial] advisers scored worse in every metric we measured than all these other roles.

"Worse on mental health, on wellbeing, the highest level of stress, the highest levels of feeling overloaded," says Fraser.

But what was driving those poor results?

"By far and above it was all the regulatory change and the constant changes hitting them in the industry, and it's been happening for 15 years, so it's been relentless."

Tremethick says he's encouraging everyone in the advice industry to take the 15-minute survey.

"We want people to put on their own face masks before they help others and so we need to understand the mental well-being of our adviser community because they are dealing with the general public on a daily basis.

"Being an adviser can be a lonely game and you couple that with the changes the industry is going through and the Covid-19 environment where no one really knows what's going on," Tremethick says.

The study will also look at who is thriving in the industry and how they manage to stay productive and positive.

"What do they do with their time and what are their behaviours?", asks Fraser.

He says one of the things they discovered in the Australian survey was thriving advisers were just as frustrated by the change and by the regulatory shifts as others.

"But it was much more about how they didn't let that frustration run their behaviour and consume them...they still focussed on how do I respond to that and what is best for my business.

"We can use this to inform and regulation and compliance moving forward."

While Tremethick says he doesn't think Kiwi advisers are worse off than their Australian counterparts he's hearing more and more regularly that "...there is an overwhelming sense it's getting hard and people are struggling".

"There's the economic climate that's quite different, you're running a business potentially from home with homeschooling and whatever else - it's tough out there.

"We are hoping the adviser community gets behind this because we want to know where we are at and what we need to do to make sure that more of us are in that thriving state...a study that tells us how we can get better I think is really important."

Tags: AIA financial advisers Mental health research Sam Tremethick Wellness

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Comments from our readers

On 24 September 2021 at 1:30 pm seandnz said:

In my opinion, the current compliance regime seems to be designed for large corporates who have huge resources, even the new FMA CEO is from a corporate background monitoring banks and large organisations, but that is not the make up of the adviser market in New Zealand.

Maybe the FMA need to separate corporate regulation from small business regulation, I know there is some differentiation but there is no way a small business owner can keep up with that and we will end up with burnt out advisers who leave the industry, and that is not a good outcome for the consumer or the adviser and the financial services industry.

In my experience, the adviser market in New Zealand is mostly not corporatised and is made of small business owners, and these hard working advisers do not have the resources to really cope with what is required now, let alone what the full licensing model may look line.

I think the regulatory bodies do not understand how a small business is run, think about it, advisers have to deal with finding new clients, look after existing clients, employment law, taxation, keep all their paperwork in order (which has now tripled), keep their education up to date, keep their memberships up to date and everything else they need to do.

Advisers are going to get burnt out if we do not change to a more realistic regulatory body who understands corporate and small business.

Sean.

On 25 September 2021 at 9:23 am w k said:

maybe the intention is to wipe out single operators. don't say it and can't say it, so just raise the bar until it is out of reach - that's the signal i'm getting.

On 13 October 2021 at 9:48 am Do what is right said:

As Sean comments, the industry is largely influenced by people who lack real understanding and knowledge of the adviser. FMA employ people with ideal thinking rather than with practical skills and knowledge. We see the same in the insurance companies who insist on employing managers from banking. It is like an electrician employing a plumber. They work in the financial sector but have little idea about financial advice. Remember, banks are getting out of insurance. That is because they do not have the ability or skills to remain in insurance. So why does an insurance company think a banking background is what is required to make key decisions in insurance companies? The adviser is impacted from all sources by people who lack empathy, understanding and knowledge. No wonder advisers are becoming more stressed.

On 13 October 2021 at 5:36 pm JPHale said:

As a risk adviser, it is the risk that is creating the challenges. And the Covid environment has not helped on top.

Compassion Fatigue with clients going through claims. And the claims are becoming more difficult for clients to navigate as well, demanding more time from advisers to assist.

Dealing with increased medical conditions as people are more focused on their health with increased medical technology resulting in new things for underwriters to deal with.

The average application my clients completed now has more information disclosed by clients than the typical application form can handle.

And this creates increased barriers to placing cover as criteria on offering cover with tighter underwriting rule books and reduced flexibility of terms means that people can't get the cover.

IP has a typical 4 exclusion or 150% loading limit, yet many people can have multiple things going on tripping this, yet they are still functional workers more so than some of the healthy ones.

The other benefits have similar limits on loadings, insurers are significantly more pessimistic with underwriting and this is impacting advisers hugely.

The level of detail needed just to do what we do without the regulatory stuff on top is way above the scope of what the typical adviser was contending with when they started.

Mental health is the biggest issue out there and risk advisers have always lead the field on disability insurance claims because of this, nothing has changed in addressing this, more things have got worse.

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