The Boutique Financial Planning Principals Group’s (BFPPG) Bruce Baker says it is too soon to know the effects of the Australian Consumers’ Association (ACA)/Australian Securities and Investments Commission(ASIC) survey.
He thinks other more significant factors, which might bring a shake out in the industry in more important ways, include massive growth of people moving into the industry.
Baker says: “It will not be long before we see massive oversupply, which will impact salaries. There are about as many people training to be advisers as there are actually practising.”
The three-year bear market will also take its toll on the industry, according to Baker.
“I have heard stories from business development managers and fund managers that a lot of dealers are experiencing hard times with poor returns and severely dented fund inflows. So advisers, especially those focused on product sales, will be under pressure as their sector suffers.”
AMP planner Paul Carter says the ACA/ASIC survey has had a big impact on compliance and regulation, identifying that the industry has some way to go on disclosure. But it has not had much affect on the fee base, which is negotiated between planner and client.
However he does not believe compliance will create a mass exodus from the planning industry. Rather, Carter feels some advisers may not want to get the education needed to continue their licence.
“The hurdles of study means some older planners won’t want to jump through the hoops.
“However those who have already gone through the CFP process won’t want to get out, and welcome changes for quality. Younger players won’t be affected.”
