About 66 million years ago an asteroid measuring roughly 12 kilometres across slammed into Earth near what today we call the Yucatan Peninsula in Mexico. It was bad news for most of the planet and it was particularly bad news for the dinosaurs.
A paper published in November last year in Scientific Reports, analysing the impact of the asteroid, says it completely wiped out the dinosaurs – for them it was an extinction event. But it also set the scene for the macroevolution of mammals, right across the planet.
Mammals survived and prospered because they were adaptable, and as the environment around them changed rapidly they were able to locate alternative food sources, continue to find shelter and reproduce in significant numbers.
Financial planning is facing a kind of extinction event of its own. Just like 66 million years ago, it’s the “dinosaurs” likely to be most at risk, and it’s the “mammals” who are most likely to survive.
By January 1, 2024, all existing financial advisers must have obtained a degree or higher, or equivalent, qualification and to have passed the industry-wide exam, otherwise they will be prevented from working as advisers.
An estimated 15 to 20 per cent of advisers are thought likely to leave the industry between now and then, because they lack either the desire, willingness or competence to reach the new standards. Some are seeking to adapt – for example, by moving into positions within their businesses that remove them from front-line advisory roles – but some will simply go.
But new professional, education and ethical standards are far from the only threats to the industry. There’s also the likely recommendations of royal commission, which may fundamentally change the economics and financial structure of advice businesses; and a collapse in trust in the industry that has occurred since the inquiry commenced.
It’s critical that licensees understand which practices in their networks are most at risk, and what must be done to do to help them survive and then grow. CoreData’s Project Yucutan is designed to map the coming changes to different segments of the advice industry, and it is already identifying segments clearly most likely to face extinction. It is also analysing how the relationships between advice businesses and product manufacturers will be reinvented in the new world of advice.
These insights are being developed through adviser responses to an online “Future of Distribution” survey*, focus groups and round tables. CoreData will collect and analyse responses to the survey before starting to feed back the findings in collaboration with the industry publication Professional Planner.
As it turns out, the Yucutan asteroid hit Earth in a region distinguished by oil-rich rocks, which, were ignited by the impact. The Scientific Reports paper says the impact alone could not have precipitated the kind of global cooling that led to the devastation of vegetation and such dire consequences for the planet’s fauna.
But the ignition of the oil-rick rocks meant more than a billion and a half tonnes of fine-particle soot was launched into the atmosphere, dispersing around the globe and causing it to cool on average by 8 to 10 degrees Celsius, and as much as 16 degrees Celsius over land.
It was kind of a fluke – a “low probability” event, as scientists call it – because only an estimated 13 per cent of the earth’s surface is made up of rock that could produce so much particulate matter. But being unlucky that fateful day 66 billion years ago is scant consolation if you were a dinosaur. Extinction is extinction, whatever the cause.
* All advisers that compete the survey will go into the running to win one of four $1000 Flight Centre gift vouchers, or one of 20 $100 eftpos cards. Please forward the following link: http://study.coredataresearch.com/index.php/148844/lang-en/Q0000/PP0001
For more information on Project Yucatan, please contact Simon Hoyle.