Leader - Keep an eagle eye on the third estate
Financial planners should closely monitor moves by Australia’s media into the fi-nancial services business. Not because there is necessarily anything sinister in their motives, but because the current round of deals may open up opportunities for ad-visers or may threaten future livelihood of advisers operating in certain markets
Financial planners should closely monitor moves by Australia’s media into the fi-nancial services business. Not because there is necessarily anything sinister in their motives, but because the current round of deals may open up opportunities for ad-visers or may threaten future livelihood of advisers operating in certain markets.
In the past year, nearly every major media proprietor has begun revealing aspects of their Internet and financial services strategies. Each media group has made dif-ferent moves but there is a common thread to each of the strategies. They all want to act as the Internet gatekeeper for financial services information and transactions.
Kerry Packer is probably the most advanced of the Australian media proprietors. Packer’s Publishing and Broadcasting (PBL) group has taken minority stakes in a number of small to medium sized financial services outfits, including Bill Ireland’s Challenger group, Contango Asset Management and MTM Funds Management. At the same time, another business with Packer links, Acxiom, is building one of the most robust databases ever witnessed in Australia. Wrapping it all up is the Micro-soft alliance ninemsn with its wide range of content.
Rupert Murdoch is not far behind. Strong rumours about a tie up with Otto But-tula’s InvestorWeb business have been rife over recent months. It is only a matter of time before other such alliances in the financial services industry are forged.
Some of the smaller players are also starting to get serious about the market. As this week’s front page story reveals, David Koch’s My Money Group is in high level discussions with John Godfrey and Ivan Barr’s FinPlan consultancy with a view to forging an alliance revolving around the MyMoney Internet site.
The underlying principle behind all these moves is the opportunity for media groups to position their Web sites as the home page of choice for consumers before they surf the Internet. In other words, they want to become the middle man be-tween the buyers and sellers of financial services - traditionally the domain of the financial planner. Since the birth of the industry, planners have been paid commis-sions on the amount of product that they sell. It is this commission that the media proprietors are chasing.
By forging alliances with the providers of financial services and building towering databases of clients, media groups have a strong chance of success in the chase. Their intrinsic advantage over competitors is their ability to provide content.
Media groups will not only act as intermediaries between fund managers and con-sumers but will also between financial planners and consumers. Financial planners have been reluctant in the past to cough up for these sorts of marketing costs, how-ever, those advisers that ignore the rise in the database and the new gatekeepers in financial; services may do so at their own peril.
AUTHOR
Jason Spits
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