Industry set for post-FSR shake-up
Financial Services Reform is likely to surprise the industry when it goes live in six weeks with one industry commentator predicting ‘hiccups’ as the market copes with the new regulatory environment.
Prescience Consulting’s Wayne Wilson predicts a six month period in which the market will be slightly less efficient as the regime is bedded down.
Wilson also predicts ASIC will turn its spotlight onto the larger players in the market given they control such a significant slice of the financial services pie.
However Wilson anticipates a shift in the landscape as small businesses continue to flourish, adding that an industry with less concentrated distribution forces means manufacturers will change the way they deal with intermediaries.
According to Wilson, big institutions will need to be less general in how they assist companies.
Part of that gradual change of course is the death of soft dollar payments, and Wilson says while the money currently used in soft dollar payments won’t go away, how it is used in the future will define a company’s competitive edge.
Praxis Partners’ Kieren Dell, meanwhile, says another change following events such as the shadow shopping survey is that clients are becoming smarter.
Dell says the financial planning industry now needs to come to grips with the fact that consumers want to control their own finances, as evidenced by the recent boom in self managed super funds.
“Clients don’t want to say that they don’t know anymore. They want to be in control,” Dell says.
Meanwhile the consulting group is setting up an academy to train business development managers (BDMs) for fund managers.
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