It has been often stated in recent weeks that this year would be a very big year for the financial services industry in terms of far reaching developments and events.
Some of this would be due to the subdued end many groups had to the end of 2001, due to economic downturns and the general malaise brought on by September 11, which would be shrugged off as the new year progressed.
But much of it has been attributed to the continuing pressures to stay at the competitive edge in a market which seems to be adding more players and more products faster than it can find consumers to demand them.
The announcement of a memorandum of understanding between ING and ANZ to roll out a funds management joint venture is possibly the first of a number of such deals we can expect to see this year.
Rothschild’s upcoming announcement in the next month or so regarding who will take an equity stake in the group will also be a key event of the year.
This edition also reports that Frank Russell is increasing its push into the retail market and rumours are strong that the other banks are also looking at definitive moves into retail within the next few months.
Bear in mind this is taking place while the wholesale side of the industry is also looking at the retail space as a rich source of clients and income.
The impact of all this from our point of view is beneficial. A good or bad year is always news to journalists but for the industry the end result is different.
Those product providers who have traditionally been the main business line of financial planners will have to compete even harder, as they see competition from not only the banks but from the likes of asset consultants and research houses which are looking at expanding their businesses.
As our discussions found in putting together the feature for this edition, wholesale fund managers are keen to stay out of the business of retail funds management but still want to offer product into that area. At the same time, industry super funds which have no interest in gathering large numbers of retail clients, are moving into the retail space by offering planning and advice services.
Clearly, the ground shift hinted at in the past has arrived and will transform the way financial services products are provided, promoted and sold to clients.
But this does not mean that the outlook is grim, at least not for those at the end of the cycle. Consumers will have an even wider range of products to draw upon for their wealth accumulation and retirement needs and at the same time, will have more questions as to how these work and which products are right for them.
This type of burgeoning market falls right into the lap of financial planners and advisers.
So while the industry goes through a large-scale change, a number of key factors will remain.
Consumers will always need good advice, they will seek able professionals to supply that advice and they will have some idea of what quality advice is and should be. Given these conditions, only the most fool hardy of planners would fail to benefit from the next wave of industry change.
