Planner confidence lagging market rebound

The 50 per cent rally in the stock market since the end of last year has failed to give any confidence to financial planners, with most still worried about the strength of their planning practices and the health of their clients' investments, according to the executive chairman of Centric Wealth, Phillip Kelly.

Speaking to Money Management, Kelly said financial planners were still “sober” about prospects in the share market despite the “bounce off the bottom” in share market prices.

“I think financial planning hasn’t rebounded spectacularly ... the atmosphere around the market isn’t the kind of atmosphere you associate with a 50 per cent increase in the market,” he said.

“So the impact on businesses like financial planning and on investor sentiment is much more sober than a 50 per cent market rise from the bottom would suggest,” he explained.

While financial planners’ revenues have bounced back due to the increase in the equity markets, there was still a lot of caution and conservatism amongst advisers, which was prompting them not to fully exploit the bounce in the market, Kelly said.

Centric Wealth was trying to balance fears of another short-term correction in market prices with encouraging clients to re-establish sensible medium and long-term strategies based around equities, he said.

Kelly said Centric still expected the prices of acquisitions of financial planning practices to be lower than they were 18 months to two years ago despite the market rally.