As self-managed super funds (SMSFs) continue to gain momentum, service provider affiliation is becoming increasingly important to both professional advisers and their clients, according to John McIlroy, Director of Crystal Wealth Partners.
"In this industry we're almost certainly going to end up with the bigger institution, vertically integrated model and then you'll have 'other'," he said.
"And I think that over time, there will be advisors who won't necessarily like that model.
"They'll want to move into a more boutique operation that doesn't have that institutional ownership," McIlroy said.
Commenting on Crystal Wealth's financial advisory and managed account service and how it would fit into the industry's evolving landscape, executive director of Crystal Wealth Tim Wedd said the affiliation would be no less relevant on the client side.
"On the client side, I think given that everyone is a self-managed super fund specialist these days, you've had institutional activity that has happened later in the piece," he said. "But some of the clients are onto that.
"They'll say 'well, do I get my accountant to do it, do I do it myself, or am I going to get an institution to do that for me?'," continued Wedd.
"And it's not just about the self-managed super fund space – it's more than that."
According to Wedd, many clients had made a conscious choice to seek a hands-on and intimate approach when it came to their self-managed fund.
"And the thing about self-managed super – which is why institutions have always struggled with it – is that it is customised, intimate, hands-on," he said.
"It is not 'let's build the box for the law of large numbers', which is what the rest of their business is built on.
"And that's fair enough, but this is the inverse," Wedd added.
"This is high value, small numbers, know your clients well, understand the intricacies."
For Wedd, SMSF trusteeships were also significant in this debate.
"Why don't more self-managed super funds go down the APRA trustee route?" he asked.
"They could equally not be their own trustee and have a regulated trustee in place, supposedly giving them pretty much the same investment capacity as themselves.
"But people just aren't interested," Wedd added. "They didn't go down the SMSF path to then go and appoint an institutionalised trustee."
