While financial planners and licensees may have to battle tainted client perceptions off the back of the Royal Commission, panellists at Money Management and Super Review’s Future of Wealth Management conference have unanimously agreed that the dealer group business model is still relevant.
Steve Davis, chief commercial officer, Infocus, told the conference that the licensee model needed a bit of work, but they provide “fundamentally important consumer protection”, and there was a strong future for them.
Chris Kelaher, managing director of IOOF, said while the contemporary model was far different from its origins, he was a great advocate for security in those enterprises and the combination of shared services, and the dealership model was here to stay.
“It stands to reason that the model has certainly changed, but it’s function remains the same … It certainly has a place,” said Kelaher.
Kelaher added that advisers have no assets in themselves, so having a financial institution behind them provides customer security.
Michael Blomfield, CEO of Investment Trends, said going forward, face-to-face time was vital in any client relationship, and the more time the planner can spend talking to the client, the better.
“The box-ticking, the compliance for the sake of compliance, the more that can be scaled, the better,” he said.
The panellists showed concerns for the profitability of dealer groups though, and the notion that licensees should only exist for consumer protection is not enough.
“We can’t end up, in a regulatory sense, having a licensee for the risk of being sued,” said Blomfield. “There should be someone big enough and wealthy enough to be held to account, but there’s got to be more.”
In terms of battling perceptions, Blomfield said the new Financial Education Standards and Ethics Authority’s regulations, while in need of tinkering, might be planners’ way out.
“There is a non-accusatory trust issue here,” he said. “The problem is, there’s been no stamp from an independently verified body.”
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