Instos may face retention challenge in strong markets
Financial advisers who are viewing institutions as a "safe port in the storm" may be tempted to venture back to a boutique or non-aligned business model when we eventually return to a growth or bull market, according to the Forte Asset Solutions director Steve Prendeville.
Currently around 90 per cent of funds under management in Australia is controlled by the major institutions - a trend that continues to increase, most recently with the acquisition of Plan B by IOOF, Prendeville said.
There aren't many independent dealer groups that aren't for sale at the moment, but it is similar to the battle for adviser talent back in the early nineties between AMP and National Mutual, the ancestor of AXA AP, he said.
"We're going back to that pattern, but as soon as that storm has passed we'll see boutiques once again flourish, the consumer will seek points of differentiation rather than the homogenised advice we're likely to get with larger institutions and only two software packages," he said.
Challenges to the non-aligned business model, such as the removal of volume bonuses, is not front of mind for advisers at the moment, but there will be a challenge on institutions for retention once we come back to a growth or bull market environment, Prendeville said.
Recommended for you
Iress chief executive Marcus Price has shared how he is seeing “massive tailwinds” in financial advice in Australia, with the firm turning its attention to digital advice following the completion of its transformation project.
Licensee Centrepoint Alliance has shared its first half FY25 results with strong performance coming from the acquisition of Financial Advice Matters.
Professional services firm AZ NGA has announced a group chief financial officer, who previously spent six years as Fitzpatricks Financial Group’s CEO.
Clime’s disposal of advice licensee Madison “needed to happen yesterday”, managing director Michael Baragwanath has told Money Management, as he concludes a severe cost-out period at the business.
