The more they change, the more things stay the same

FOUR YEARS is a long time in the rapidly changing retail financial services business. But while developments have come thick and fast in my four years atMoney Management, the overriding themes have stayed the same.

On a broad financial planning level, advisers have been seeking greater control over their revenue sources and business since the industry emerged in the 1980s.

What started out as the great ‘who owns the client’ debate, has metamorphosed into the great race for equity. Advisers are seeking and getting equity stakes in master trusts, dealer groups and fund managers in a bid to build businesses with a higher sale value.

The race for equity spawned the co-operatives movement of a few years ago and has fuelled the massive but floundering consolidator movement we see today. It is also the reason why virtually every master trust outside of the biggest five now offer advisers an equity share as an incentive to put client funds in a particular platform.

This has been one of the key reasons why master trusts and wraps now dominate retail inflows into managed funds.

But while they have won the distribution battle, there are signs master trusts are starting to feel the cold winds of competition.

BT’s surprise move from wrap wholesaler for adviser groups to wrap retailer is a sign of a maturing market, as is Navigator’s move to charge fund managers for the right to appear on its master trust menu.

The upcoming Financial Services Reform Bill regulations, if it is not watered down much further, really vindicate the financial planning model developed over the past 20 years. Sure, there will be some pain for advisers who have not chosen this model, but overall it will bolster the integrity and professionalism of the industry.

While these challenges and changes continue to make the industry vibrant and dynamic, the phenomenal growth in personal financial services seems certain to continue. The good news for our industry is that it is now one of the most sophisticated in the world, more than ready for the growth onslaught propelled by the mass exodus from the workforce of baby boomers.

This is the last edition ofMoney Managementunder my stewardship. I am happy to be leaving in such a positive environment for the industry and forMoney Management. I would like to thank all the great people in the industry who have made the past four years so memorable.

I am also pleased to announce the appointment of Jason Spits as editor ofMoney Management. Jason has been a key player in the team for the past two years and I am confident he will continue the fine tradition of quality journalism that has made this newspaper such an integral part of the retail financial services industry.

—Stuart Engel