Broker predicts planning industry split
A specialist financial planning business broker has claimed regulations and the cost of advice is likely to split the industry into two distinct sectors — one dominated by the major banks and institutions and the other by non-aligned advisory groups.
Connect Financial Service Brokers chief executive, Paul Tynan believes that non-aligned advisers will dominate the provision of personal, holistic high touch advice, while the banks, industry funds and other institutions will dominate a sector based on scaled advice or the provision of personal advice using proprietary product.
Tynan claims that while the accounting profession has never really embraced financial planning, this is changing as they see their core disciplines (namely tax and compliance) come under closer review from the regulators and need to obtain licensing for Self Managed Superannuation Fund (SMSF) advice.
"They are going to be forced to renew their qualifications to protect revenue and clients," he said.
As well, he said the move to fee for service for advice would likely continue the trend of accounting and financial planning businesses joining together to form new business models.
Tynan said it had been his personal observation that the majority of financial planners hold more tertiary qualifications than accountants — something which he acknowledged would shock some accountants and their industry bodies.
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
