Compliance remains the main bugbear for NZ financial advisers, according to a just-released study, but the industry mood has perked up somewhat over the last couple of years since a new regulatory regime came into force.
According to the NZ Financial Advisers Wellbeing Report published this month, the advisory sector has adapted to the Financial Services Legislation Amendment Act rules that came into full force this March following a two-year interim licensing period.
However, the AIA-sponsored study conducted by the Australian Deakin University and The e-Lab says the “greatest source of stress they face is Compliance, with 50% of advisers rating it as ‘very highly or highly’ stressful”.
“Also, 41% of advisers said that the stress of the job was having a negative impact on their quality of sleep,” the report says. “Compared to 2021, advisers are rating their clients as less engaged in their financial wellbeing (a drop of 7%).”
But adviser mental health has improved in the two years since the inaugural study with the psychological risk decreasing by 7 per cent over the two years since the inaugural study.
“In addition, a 4% drop in Work overload and, similarly, a 4% reduction in Stressful issues. We also saw a 6% drop in Stress levels,” the Deakin report says.
The finding comes with a caveat, though, that the aggregate stress ratio in the advisory industry remains high when measured against the general working population.
An average of two in five advisers reported “experiencing high levels of stress ‘very often/often’”, the survey says, or double the proportion of the wider workforce as per Statistics NZ figures published in 2022.
While regulatory compliance tops the adviser stress charts again in 2023, the reading of almost 51 per cent represents as 10.5 per cent decline on the previous survey. In fact, the latest study recorded lower stress readings across almost all factors, led by a more than 15 per cent drop in concerns about education requirements: just 22.2 per cent of respondents cited the issue as stressful in 2023 versus 37.4 per cent two years prior.
The survey did pick up a slight stress increase in worries about revenue and expenses as well as developing new business with both factors hovering around 30 per cent in both reports.
Sharron Botica, AIA chief partnership and distribution officer, says in the report: “Even though the 2023 results were more positive than the results from 2021, we strongly believe that prioritising the mental health and wellbeing of financial advisers is not only important for their personal and professional development, but also for the overall financial wellbeing of the clients they serve.”
The study polled 336 financial advisers from a broad cross-section of the industry followed by further in-depth interviews with 21 respondents.