Land grab opportunities for non-aligned dealer groups
There is a definite future for non-aligned dealer groups in a changing financial services environment that will present opportunities for consolidation and the acquisition of new advisers, according to DKN chief executive Phil Butterworth.
Speaking about the non-institutional sector of the market in a discussion session at the Financial Services Council conference in Melbourne last week, Butterworth said the next three years would present a big land grab opportunity in the wealth management space for organisations that could adapt to upcoming changes.
“The good will flourish, and it’s going to be a great opportunity to weed out those that shouldn’t be there,” he said. He added that professionalism would rise and the quality of advice being provided to the public would improve.
Dealer groups have been viewed up until now as a form of distribution for products and services, but moving forward the offer from the dealer is going to be more about adding value to the practice along with better quality advice with more focus around business solutions, governance, fiduciary obligations, best practice solutions and technology, he said.
Dealer groups won’t be sponsored from the manufacturing side, they’ll have to stand up in their own right and provide quality services, he said.
This means the adviser mindset will have to shift away from what the best dealer group offer is, and dealers will become more selective about who they recruit – instead focusing on fewer, higher quality advisers.
Butterworth also predicted considerable consolidation involving practices and dealer groups as a large number of advisers left the market.
Many older advisers may not have the energy to go through another wave of reforms, he said.
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