Dire warning for complacent planners
Financial planners who are not giving their clients choice and integrated service will fail, says National’s head of global financial services, Peter Flavel.
The bank has undertaken a major survey of consumer attitudes to financial planning and nine out of ten wanted to spilt their investments between a range of financial service providers.
"Consumers are demanding more choice and they are moving away from trusted brands to trying other investment options," says Flavel speaking at the FPA conference last week.
This is leading to more products being offered and Australia has seen a 40 per cent increase in the number of funds being offered in the past 12 months.
The survey also found 90 per cent of those surveyed expect financial planners to meet all their needs and provide a total service.
"People are also expecting financial planners to provide integrated services that will include shares, credit cards, mortgages as well as investment products," he says.
Clients are also looking for convenience and the use of the Internet will be playing a much greater role, Flavel says.
Convenience is leading to more choice and pushing down prices.
Flavel believes in Australia expense margins for financial services provider are going to be squeezed in the next three years and this will lead to cuts in entry and exit commissions.
"Financial planners will demand and receive more of their compensation for services in the form of an unbundled adviser fee, rather than ongoing trails paid by fund managers."
This changes will also mean the way the financial planner operates will change dramatically in the next few years, Flavel says.
The planner of the future will be a business owner or entrepreneur and provide guidance around the client's entire financial life, says Flavel.
With greater use of technology they will now manage 800 clients having outsourced the administrative tasks.
Technology will enable clients to be contacted by the Internet and there will be engines and platforms to produce modelling, recommendations and client reviews.
Recommended for you
Retail investment into private credit funds could surpass that of sophisticated investors, according to ASIC, but the regulator admits it is unsure how and where these individuals are first being introduced to the vehicles.
With the high cost of advice keeping young Australians locked out of advice, a fintech provider has said digital advice is key for licensees to capture this unadvised demographic.
ASIC chair Joe Longo has announced he will step down at the end of his term, departing the corporate regulator in May 2026.
When it comes to the phase-out of AT1 bonds, Schroders fixed income manager Helen Mason has urged financial advisers to sell up sooner rather than later or risk capital losses.
