Broker predicts planning industry split
A specialist financial planning business broker has claimed regulations and the cost of advice is likely to split the industry into two distinct sectors — one dominated by the major banks and institutions and the other by non-aligned advisory groups.
Connect Financial Service Brokers chief executive, Paul Tynan believes that non-aligned advisers will dominate the provision of personal, holistic high touch advice, while the banks, industry funds and other institutions will dominate a sector based on scaled advice or the provision of personal advice using proprietary product.
Tynan claims that while the accounting profession has never really embraced financial planning, this is changing as they see their core disciplines (namely tax and compliance) come under closer review from the regulators and need to obtain licensing for Self Managed Superannuation Fund (SMSF) advice.
"They are going to be forced to renew their qualifications to protect revenue and clients," he said.
As well, he said the move to fee for service for advice would likely continue the trend of accounting and financial planning businesses joining together to form new business models.
Tynan said it had been his personal observation that the majority of financial planners hold more tertiary qualifications than accountants — something which he acknowledged would shock some accountants and their industry bodies.
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