Industry fund threat to planners
The burgeoning union backed industry superannuation fund sector will prove the greatest threat to the viability of boutique financial planning groups over the next decade, the associate director ofMacquarie Portfolio ServicesMatthew Rady has warned.
Speaking at a Resnik Communications conference on financial planning yesterday, Rady highlighted a series of threats to boutique advisers, including from banks and stockbrokers, both of whom would continue to tap into existing client bases to expand their planning businesses at the expense of smaller groups.
“These players have a significant potential to shape the market going forward,” Rady says.
But it is the rapidly growing industry superannuation fund sector, which is pushing increasingly into retail financial services in an attempt to capitalise on its captive membership base, which could prove the most dangerous competitor to boutique financial planners.
Industry super funds already account for some seven million member accounts and $45 billion worth of assets, and have been the fastest growing segment of the superannuation industry for some time.
According to Rady, large industry superannuation funds likeHESTAandARFare also outspending all other financial services groups, apart from BT, in a marketing effort to promote themselves as alternatives to more traditional providers of retail financial products.
“If these funds have their way, they will have 10 million members who will not look for outside financial planning advice,” Rady says.
But it is not all doom and gloom for smaller financial planning groups. Rady says the key for boutique financial planners, in competing against banks and stockbrokers as well as industry superannuation funds, is to carve out a niche for themselves.
Whether that means specialising in clients of a certain age or income group, Rady says it is the only way for smaller groups to prey on the key competitive weakness of larger and less flexible organizations.
“Don’t be afraid to capitalise on market opportunities through specialisation,” Rady says.
Recommended for you
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
