Competitors threaten a not-so happy new year

At this time of the year we usually wish all our readers a very happy and prosperous new year. But perhaps we need to wish it just a little more strongly than usual this year.

That might seem unjustified at first glance. After all, our Point of View columnist Gerard Doherty paints a bright picture of planners' prospects for the new year based on a by Perpetual Funds Management survey of planner concerns and investor attitudes.

He welcomes, for example, its finding that planners are less concerned about revenue competition and more about adding value to the customer. And he applauds planners' greater acceptance of technology and their increased recognition factor as further positive signs.

The employment market for planners also appears to be booming. Doherty cites a recent Sydney press report indicating that demand for planners was growing along with their salaries. And human resources expert Chris Emery, writing in this edition's Recruitment column, says paraplanners' salaries are also rising as demand for their services increases.

But not so fast. A quick perusal of this and recent editions of Money Management shows that planners face looming competitive threats on a number of fronts.

First there's the banks. Although planners are fond of deriding their poor public image, the fact is that the financial service arms of Australia's big four banks are gobbling up retail fund inflows and market share faster than most people realise.

Westpac Financial Services, for example, grew its sales last year by an estimated 30 per cent and has lifted its market share for some products by up to 50 per cent over the past 18 months. And Commonwealth Financial Services has topped ASSIRT's retail funds inflow table for the past two quarters in succession.

Then there's the supermarkets. Hoping to emulate British success stories like Sainsburys and Tescos, Australia's Coles and Woolworths recently unveiled their plans to distribute banking and financial service products to their customers. Any planner not yet convinced of the threat such plans could pose to their business should turn immediately to our story on page 4 outlining Coles' strategy.

And finally there's "the big fella". Our page 1 story on Kerry Packer's entry into the funds management business combined with his massive investments in on-line and digital delivery systems and his sprawling magazine and television empire sends a clear warning to planners. New technology providers are eyeing their turf greedily.

Yet judging from the responses to this edition's Adviser Feedback, few of our readers seem to have come to terms with these competitive threats when previewing the year ahead. So a happy and prosperous new year for planners?

Let's hope so.