Times post the Future of Financial Advice (FOFA) reforms will suit independent service providers such as Paragem, according to the company’s founder and managing director, Ian Knox (pictured).
Paragem announced today that its virtual independent financial adviser (IFA) network now exceeded 200 licensees and Knox believes the changes to the planning environment likely to flow from the FOFA reforms will emphasise his company’s product offering.
He said learning how to operate profitably and independently from product manufacturers was one of a number of key challenges ahead for many IFAs.
Knox claimed the market was transitioning quickly to a new paradigm such that while many advisers were still grappling with how to gain a share of the product margin, product manufacturers and private equity firms were reversing this and seeking to gain a share of the advice margin by investing in advice businesses.
“This positions IFAs really well as volume bonuses are eroded and advice fees increase,” he said.
“In our opinion, the FOFA outcome will provide added stimulus for advisers to become independent, either by being self-licensed or under a conflict free licensing arrangement,” Knox said.
