Bank dominance not an issue - Deloitte
Despite all the discussion of the perils of vertical integration and undue bank dominance in the Australian financial services industry, major consulting firm Deloitte is arguing Australia's financial system is not concentrated to a degree that would indicate problems.
The consulting firm has used its second submission to the Financial Systems Inquiry to argue that there is no concentration which would cause problems for competition whether by sector (banking, insurance and wealth management) or overall.
Further, it has cited the methodologies used by the Australian Competition and Consumer Commission (ACCC), the Herfindahl-Hirschman Index (HHI), to suggest the main retail banking product markets in Australia are below the threshold level of 2000 that would signal further investigation is warranted.
"Indeed, if anything, parts of the system including superannuation may be too fragmented and some consolidation — while not an easy task — may be beneficial in creating a more efficient sector and reducing costs for consumers," the submission said.
"Similarly, many consumers benefit from the convenience and efficiencies inherent in solely or predominantly using an individual financial institution," it said. "The trend towards vertically-integrated suites of services is a reflection of both the benefits that many consumers derive from managing fewer financial relationships and economies of scale and scope for providers."
The submission said it was a reflection of a market in which competition was working effectively.
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
