Former Westpac-controlled Pendal Group has clearly pointed to the changing face of the financial advice industry as having significantly impacted fund flows to the company.
Pendal group chief executive, Emilio Gonzalez used the release of the company’s annual report along with its full-year results this week to point to the clear fall-out for investment managers from the Royal Commission.
He said that while Brexit had consumed the United Kingdom and Europe, the Australian market had been going through its own transformation in the wake of the Hayne Royal Commission.
“Hayne produced a rethink from the Australian banks about the extent of their participation in the provision of personal advice. They have either completely exited advice or significantly scaled back operations,” Gonzalez said.
“Advisers are also voting with their feet, with a significant number switching to privately owned groups and away from the institutional owned model.”
“It is a period of significant change, which has manifested into significantly reduced flows in the Australian wholesale channel,” the Pendal CEO said. “Nevertheless, we expect the dislocation to settle and fee positive about our medium and longer term prospects.”
“We have responded to this rapidly changing landscape by creating a more channel-focused approach with end-to-end accountability for each of our three key segments (banking and insurance, independent licensees, and private bank/family offices).”