A leading financial planning spokesperson has said that the Future of Financial Advice (FOFA) reforms will push wealth management groups into the old ‘one-stop-shop’ business models of the 1990s.
Fiducian managing director Indy Singh (pictured) has said that the ‘all-in-one’ model being adopted by several groups is nothing new, but is simply history repeating itself, with FOFA creating new opportunities to consolidate.
One such group is Yellow Brick Road (YBR), the new wealth management venture by Mark Bouris.
By offering mortgage broking, financial planning, accounting and insurance broking all under one roof, Bouris says his licensees can increase their revenue streams while doing business more efficiently.
Licensees do not need to know how to do all of those things in order to open a branch. Rather, all of the accounting and financial planning is done from head office, while the licensee gets payment for originating the client.
According to Bouris, YBR takes the non-revenue earning hours away from licensees and does the work out of head office.
"We’ve basically deconstructed how financial planning is normally done and we’ve built economies at a head office level to increase efficiency," Bouris said.
To Bouris, a branch managers’ value comes in "gaining clients, managing clients, having a relationship with clients and fact finds".
"Most of them can deal with mortgages, some can do life insurance, while the rest we do at head office," he added.
Since its inception in 2007, YBR has attracted 61 licensees and has set a target of signing an average of one branch per week over the next 12 months.
Another group that is looking to dabble in financial planning is the mortgage aggregator, Vow Financial.
Vow Wealth was launched to enable Vow brokers to diversify their range of services to clients, develop new income streams and help "quarantine" their clients from financial planners who have been "encroaching on their territory", according to Vow chief executive officer Tim Brown.
It said that while 70 per cent of its brokers would never be planners and would simply act as referrals, 20 per cent wished to offer limited advice, while the remaining 10 per cent wanted to become qualified financial planners.
Singh said that while these businesses would be in direct competition with financial planning businesses like his own, he encouraged the move so long as those giving advice were qualified and properly trained.
"It’s good that they can offer an extended service. It’s good for them and it’s good for the industry, I say."
"What’s wrong with having a few more players in the game? More people get advice and as long as it’s properly done and it’s good quality why is that wrong? Bring it on," Singh said.
