The financial planning landscape, provided the recommendations of the Productivity Commission and the Royal Commission are executed in totality, will look very different by 2030 and there will be losers and winners, according to a study by online advice portal wealthdigital.
According to the firm’s chief executive, Wayne Wilson, advice in general would be driven more strongly by consumer needs than product solutions.
This would mean that planners who were willing to move into transactional models would need to embrace new advice service offerings such as aged care advice and debt management advice.
At the same time, those who decided to remain on current revenue sources, such as insurance commissions and advice fees relating to retail super, would see their margins dwindle.
“We expect a dramatic change in planner demographics through a combination of forced exits, new entry standards and significantly reduced practice valuations. The era of the career-changer is coming to an end,” Wilson said.
Additionally, the biggest industry super funds would be expected to monopolise, he said.
“Their intra-fund advice services will be the dominant source of pre-retirement, non-SMSF super advice to consumers. This will extend into retirement advice in line with the progressive direction of retirement income stream policy,” Wilson said.
However, retail funds run for-profit would suffer under the Productivity Commission’s recommendations on efficiency in the superannuation industry as active investment strategies inside compulsory super funds would be replacing by index-tracking funds management.
Wilson also believed that self-managed super funds (SMSFs) and investments through managed accounts would remain prominent in the future.
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Here is how it will look. Either the bank of vertically integrated inhouse Industry Fund Planners wont be allowed to be paid salaries from the general bundled admin fees (at the expense of members who are not receiving advice], OR "Opt in" arrangements for fund members of all other funds will be done away with. You cannot have both legally. This is set to be come a massive Taxi Driver VS Uber Driver issue. Logic says it will be fully exposed & dealt with, one way or another. This situation where some fund members can receive advice without requiring Opt In arrangements, is a massive massive racket. Best solution? Just do away with Opt Ins.
It be dominated and legislated by Industry Super Funds and the Labor party. End of game!
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