EXCLUSIVE: Regulation and workloads driving advisers to drink

Preliminary results from the recent AIA Adviser Wellbeing Survey have uncovered some concerning results with around half of those surveyed saying they are using alcohol to cope with stress.

Thursday, December 9th 2021, 6:55AM 11 Comments

by Matthew Martin

Sam Tremethick.

Also of concern was that 25% of advisers surveyed indicated they were considering leaving the industry altogether.

In late September, AIA undertook a wellbeing survey of almost 600 Kiwi financial advisers to gauge the mental health of advisers and explore the habits and attitudes of advisers experiencing positive mental wellbeing and understand the behaviours needed to manage significant market disruptions.

The research is being done by Sydney-based researcher Dr Adam Fraser, founder of The e-lab, and Dr John Molineux. AIA NZ is sponsoring the research and will make the findings available when the full report is completed around February next year.

AIA NZ chief partnership insurance officer Sam Tremethick presented some of the preliminary findings during a virtual adviser roadshow saying there were some concerning results, as well as some positive findings.

"The feedback was honest and raw, and to be honest, confronting at times but it provided us with a great insight as to how you are feeling and how we can make the industry stronger," he said.

"The most alarming statistic that came out of our study was that 25% of all advisers surveyed said they were considering leaving the industry.

"This is a massive concern as we know that clients are better off if they receive financial advice and understand that our customers will be the poorer for it if this is lost."

Tremethick said while collectively this paints a concerning picture of the health and wellbeing of the adviser market, Kiwis are still faring a lot better than their Australian counterparts in almost all areas.

There were some positive points uncovered as well – one being there are pockets of advisers who are doing better than ever in the current environment, and the report will share some insights into what they do differently to thrive.

Early Adviser Wellbeing Research findings:

- 61% said government regulations made it stressful getting up to speed and complying with the new regulatory framework.
- 37% said meeting future education standards was also a source of stress while over a third said it was highly to very highly stressful ensuring they comply with these requirements.
- 41% said work overload was a major cause of stress, resulting in approximately a quarter of all advisers saying they are considering leaving the industry.
- 43% of advisers are using alcohol to cope with stress, have poor sleep, and a good portion are seeking medical care due to work pressure and stress.

Tags: AIA Mental health Sam Tremethick Wellness

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Comments from our readers

On 8 December 2021 at 8:50 am Murray Weatherston said:

I wonder if the regulators and officials would consider these findings just "unintended consequences"?

On 8 December 2021 at 9:44 am w k said:

@murray, don't forget, they're the experts. if they ask you to draw a blue line with a transparent ink pen, you better do it.

On 8 December 2021 at 10:39 am w k said:

btw, you may include me as a possible candidate to the 25%. i enjoy what i am doing, but if i can't overcome the killjoy, i'll have no choice but to follow the exit door.

good luck to "better" consumer outcome.

On 8 December 2021 at 12:28 pm Matron said:

Only 25%? The other 25% must have aready left.

On 8 December 2021 at 12:54 pm Good Hamish said:

I think the biggest concern is the uncertainty which still prevails. Even now after almost 3 years of upcoming changes in regulation, we await the final outcome of having COfi in place in terms of commissions. The Axe will always now hang on our industry as the wording leaves the door open for regulation on business to business payments.

I can't think of any other industry that has regulations around rates of payments between businesses. Would it be cynicle for an adviser to think this could be due to more than customer outcomes.

I feel like we work hard as client advocates but our wings are still being clipped.

On 8 December 2021 at 2:29 pm valkyrie6 said:

Let’s also add to the mix the huge amount of pressure being inflicted on advisers and adviser businesses by certain dealer groups and training providers, its very difficult to find a dealer group that actually has is advisers interests at heart , going under a certain large dealer groups FAP licence an adviser businesses is basically held to ransom regarding member ship fees as the group can charge what ever they want with no cap or ceiling on what they want to charge as they know it’s their way or the highway, the group knows that if it cancels the advisers membership they are automatically cut off from dealing with banks so their business is automatically rendered closed, lively hood cancelled , this type of power seems archaic , not only can a group cancel your accreditation with the lenders it can also keep your cloud base CRM info ( all client data) as they own the CRM not you .
I know of an adviser that moved away from a large dealer group (stressful in itself) to a much more user friendly one that didn’t also have its own branded arm competing directly against you, so he could own his own non-cloud-based CRM only to find out the previous dealer group purchased the dealer group he just joined, back to square one.

Another adviser told me that they used a certain training provider to complete their level 5 and to help him as his business get ready to apply for a FAP licence.
He started the process in 2020, completed level 5 at cost of approximately $ 2,500 , that paid $ 3,000 for help getting ready for the FAP licence , then the training provider said you now need extra courses , updated level 5 amendments $ 2,500 , a close the caps course $ 2,500 , governance course $ 2,000 , and a pre audit FAP application review $ 4,000, he still has not applied for the FAP licence and is seriously stressed out due to time frames.
On top of all this we as professional advisers still need to provide the best service, we can to our clients just like we always have.
The stress is real

On 8 December 2021 at 5:31 pm Amused said:

Financial advisers unlike land agents, lawyers and accountants for the vast majority of NZ consumers remain a “free” service. We provide independent advice saving our clients in many instances thousands of dollars annually. To demonize a profession so badly now that experienced advisers are quitting or driven to drink is deeply concerning.

I am not sure why financial advisers have been targeted so overzealously with regulation. It’s certainly not because of the number of complaints been made against our industry annually. The complaint stats produced by the various dispute resolution schemes make that fact abundantly clear. I suspect it’s actually because of all the new regulatory jobs and education revenue that can milked now from our industry. So much then for the consumer been the key focus of regulation. Money and jobs. That’s what regulation is actually all about.

A shame that this Government isn’t focusing its attention and resources instead on the real estate industry and how many consumers there are ripped off, lied to and basically screwed over by land agents on a day to day basis. These land agents who take commission off the customer themselves get a free pass to do whatever they like when it comes to having no ethics and integrity whatsoever. The current watchdog The Real Estate Authority is a bad joke.

On 9 December 2021 at 8:07 pm w k said:

just thinking aloud, and i don't know the answer.

over 40% advisers turning to alcohol and facing stress is not a joke. if some of these advisers do turn alcoholic or need psychiatric treatment, and even had to quit the business due to mental health issues as a result of all these new regulations imposed, will they be able to take a class action against the regulators? we're not talking about 5-10% advisers who are badly affected, we're looking at nearly half from the 600 surveyed - what if this is also true for the whole industry?

not the best comparison, but like the council allowed certain materials (eg. monolithic cladding) to be used for building. then some years down the track, the building became leaky. the council got sued.

just curious to know.

On 10 December 2021 at 7:59 am LNF said:

@w k
Off the subject but comment on the cladding
A recent court case found that the issue with leaking was not the product, it was the poor installation of the product.
Chances of an Adviser Class action success would be near zero. The regulatory changes really are not about customer outcomes, they are more about hammering the Insurance and Banking industry. Latest being an announcement yesterday about High Court action over home loan customers and account transaction fees
Get used to it, it will only get worse

On 10 December 2021 at 9:25 am w k said:

@lnf: yeah, i've anticipated this result for advisers, however it's worst than i thot. for sure it didn't cause me any stress and i won't have any mental issues. it's a matter of how long i tolerate all these nonsense.

On 10 December 2021 at 1:33 pm Dirty Harry said:

oh OK
so like the leaky buildings:
it's not the regulators fault, and it's not the product manuf. fault. It's us, the advisers who are doing it wrong.

It's only stressful and potentially faulty because we are using ("installing") the product (advice) incorrectly.

Actually, sounds about right:
"poor installation".... I remember a story recently where an adviser had to pay even though the customer was to blame... and the FSCL said something about "poor......"

FML I need a drink

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