Time to seek new advice models
The financial services industry’s preoccupation with large-scale business operations is creating significant performance issues for bigger players in the industry, argues Sealcorp chief executive Ian Knox.
Addressing delegates at last week’sResnikStrategic Wealth Management Forum, Knox said there needs to be greater consolidation of distribution by large players, which he added need to also adopt different approaches to distribution.
“The industry has matured and these approaches need to consider using multi-skilled people across the distribution network. Selling financial advice is about channel management and making use of low cost platforms,” Knox said.
“The question for fund managers with distribution is who and how will advisers distribute the manager’s wares and until we develop standardised ways to do so, it will still be a troubled world in distribution.”
Knox claimed that despite most distribution networks being in the hands of institutions, advisers would return to working outside those groups in the coming years as consumers seek these planners for ‘independent’ advice.
“This was made clear in the Australian Consumers’ Association survey, which further highlighted the need to own distribution is a furphy.”
According to Knox, financial planning has done well off the back of the superannuation guarantee but still needs to develop a scaleable model so clients can access cost effective advice.
“We need to move away from providing answers before the question has been asked by the client and no longer say ‘here’s what you get, now what did you actually want?’.”
AUTHOR
Jason Spits
Recommended for you
Two commentators have shared why cultural alignment can be the biggest deal breaker when it comes to advice M&A and how to ensure a successful fit.
Formal education has played a large role in enhancing the advice profession over the last decade but, with the bar now so high, two advisers debate whether it is necessary to complete additional study.
With an abundance of private market options coming to market, due diligence becomes increasingly important as advisers separate the wheat from the chaff, adviser Charlie Viola has said.
The Treasury has launched a consultation into how the $47 million special levy for the Compensation Scheme of Last Resort will be funded.
