Concerns have been raised about the ever-shrinking independent dealer group sector and the potential impacts on the advice provided to clients in the future.
The Money Management/DEXX&R Top 100 Dealer Group table revealed that only two of the 20 largest dealer groups in the country (in terms of planner numbers) have no ownership links with an institution.
Before Count Financial was acquired by the Commonwealth Bank and IOOF Holdings bought DKN, the Treasury estimated around 85 per cent of planners Australia-wide were institutionally aligned.
Furthermore, ASIC recently identified ownership links between product manufacturers and financial advice as one of the threats to the industry's integrity and a barrier to the "provision of good advice".
Rick Di Cristoforo of Matrix Financial Planning, which was recently placed on the block, said consolidation or vertical integration is not necessarily a bad thing, as long as it does not impact the quality of advice and the services and products that clients receive.
"We know there've got to be some organisations that put an implied or explicit requirement on their adviser force to do certain things," he said. "My question is: when people start operating in such a business structure, what are they required to do in order to maintain their alignment with a particular organisation?".
Paul Harding-Davis, managing director of the relatively small dealer group Premium Wealth Management, said he was worried that leaders of large institutions see their adviser base as a product distribution channel.
"There is this 'distribution channel mentality' currently present in the sector and I would really question the notion that this is the best way to develop a profession," he added.
But consolidation might slow down in the future as institutions find a new way to poach advisers.
Former head of Professional Investment Services Graham Evans said banks learned their lesson during the Count/BT 'saga'.
"What's become evident is that when they buy dealer groups they don't necessarily buy the planners and the clients associated with those planners," he said. "And that's going to make people think twice about what it is that they're actually buying."
