Financial Advisers Facing Mental Health Crisis
The recent Mental Health Awareness Week in May brought some focus onto a lot of important issues, with the mental health crisis facing financial advisers being one of them.
According to the latest Embark Investor Confidence Barometer (EICB) published recently, the mental health crisis among advisers is being caused by a number of intertwined issues including rising business costs along with increasing workloads. Another issue is the expanding regulatory obligations all advisers must adhere to, as well as numerous ad hoc changes to government policy
The EICB revealed that financial advisers believe that these significant changes to government policy along with the expansion of regulatory obligations soon to be introduced by the Consumer Duty are the main drivers behind the rising costs and increasing workloads.
Consumer Duty Concerns
The Consumer Duty is a new set of regulations being introduced by the Financial Conduct Authority, and is set to go live from July 31. It covers existing financial products and services and aims to ensure customers receive 'good outcomes’ and that advisory firms provide evidence that such good outcomes have been provided.
The new regulations require many advisers to update their businesses processes under ever increasing pressure to meet the deadline.
EICB Results Show Significant Strain on Advisers
Of all the financial advisers surveyed for the EICB, 60% said that the ad hoc changes to tax policy had a big impact on their business processes. Even more said that they had to outsource to other adviser companies and consultants in order to meet the expanded Consumer Duty requirements.
In addition to these concerning figures are another 30% of surveyed advisers stating that they don’t have confidence in their ability to be ready for the go-live date of the new Consumer Duty requirements at the end of July.
Embark say that the findings of their Barometer survey indicate that financial advisory firms are operating under significant strain, with the current pressures compounded by the rising business costs due to inflation. The EICB also revealed that there is significant amounts of pessimism for the future. Indeed, only 38% of the surveyed advisers believed that inflation would be back under control within the next couple of years.
Supporting Mental Health Support for Advisers
With no end in sight for the growing issues facing advisers, it is understandable that it is taking quite the toll on mental health in the sector. However, awareness of the issue is always the first step towards a solution, and then it is about providing support for mental health in the workplace.
This issue was discussed by the intermediary distribution director for the Embark Group, Ranila Ravi-Burslem, who said: “People’s awareness of mental health and their willingness to discuss it has grown immeasurably in recent years. We know from our engagement with advice firms that they are really feeling the impact of heavy compliance burdens, higher workloads, and increased business costs, but our survey really helps put this into perspective.
“Providers and platforms must do more to support advisers and help lighten their workload.”
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