Consolidation of dealer groups inevitable: Bloch
The consolidation of financial planning dealer groups is cyclical and inevitable, according to the chief executive of the Financial Planning Association (FPA), Jo-Anne Bloch.
Answering a question during the Association of Superannuation Funds of Australia conference in Melbourne, Bloch said dealer groups were simply being influenced by the obvious commercial imperatives.
And she said one of those imperatives was that larger dealer groups benefited from their scale.
"It costs a big dealer group less in a year to support a single financial planner than it does a smaller dealer group," Bloch said.
She said the FPA had done some informal modelling on costs that had clearly defined the scale advantage.
"We calculated it cost small dealer groups around $126,000 a year to support a single planner compared to around $50,000 for a larger group," Bloch said.
She suggested while recent regulatory changes might have placed increased pressure on dealer groups, the commercial dynamics had been a long-running factor.
AUTHOR
Mike Taylor
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