Industry Funds Services (IFS) chief executive, Cath Bowell has directly questioned how many financial planning entities will remain when cross-subsidies are being removed in the wake of the Royal Commission.
Speaking on a panel during the Conference of Major Superannuation Funds, Bowtell also predicted that the Financial Adviser Standards and Ethics Authority (FASEA) code of conduct and code-monitoring bodies were likely to have more impact on the future of advisers in the industry than degree-minimum educational qualifications.
Discussing the future of the planning industry in the post-Royal Commission environment, Bowtell said she believed that the planning model being pursued by IFS and its associated superannuation funds would remain little-changed but suggested the situation was much more uncertain for other planning entities.
“It is a question whether some entities can survive in a world where cross-subsidies have been removed,” she said.
Elsewhere during the panel discussion, superannuation funds acknowledged that they too would be impacted by the tightening of the rules around paying ongoing advice fees from members’ accounts.
REST national manager of Advice Delivery, Greg Fleming said he believed his fund would be little affected in circumstances where 95 per cent of its advice was intra-fund, but HESTA executive, Member Engagement, Matthew Halpin acknowledged the fund would have to stop deducting fees from member accounts.
He said he believed this would add to the cost of providing advice which was something which might have to be absorbed by the funds.