Future looks brighter for advisers
Things are looking up for financial advisers, with fewer reporting difficulties finding new clients, less fee pressure than expected in the wake of increased disclosure requirements, and compliance burdens being accepted as part of daily life.
The increasing optimism was evident in the 2005 Assirt /Wealth Insights Market Trends Report, released exclusively to Money Management last week.
Wealth Insights managing director Vanessa McMahon said two years ago over half of the advisers surveyed said finding new clients was one of their biggest concerns. In their latest report, one-third of the 300 advisers surveyed reported difficulties.
“Advisers have become more confident about articulating the value they provide their clients and the general professionalism of the industry,” McMahon said.
Focus groups conducted as part of the research revealed fee disclosure was also having less impact than expected, with advisers indicating most clients were happy to pay fees if they understood what they would receive in return.
Contrary to expectations, many reported they had actually increased their fees in the past year.
McMahon said compliance continued to burden financial planners, with 81 per cent of respondents listing compliance as a major concern for the industry.
The research found nearly one-third of advisers had increased their weekly working hours over the past two years. Some had also taken on extra staff to deal with compliance.
“But the degree of frustration from advisers has moderated. The mood is now one of resigned acceptance to their lot,” McMahon said.
HBL Mann Judd managing director of consulting Bob Neill said compliance impacted profitability in the short-term as planners put in place infrastructure and systems or outsourced arrangements to fulfil their obligations.
“However, what we would expect is that the process of looking at the business for compliance and other aspects should focus them on areas they are perhaps not as effective or as efficient in, and longer-term the businesses should benefit.”
Neill said many planning practices had already adapted to the new requirements.
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