Planner exodus forecast

As many as 30 per cent of advisers could exit the industry within the next two to three years, greatly enhancing the need for immediate succession planning, according to BT’s head of dealer groups and licensee select, Neil Younger.

Speaking at the annual conference of BT-owned dealer group Securitor, Younger said it was realistic to expect the adviser exodus to mirror the 30 per cent seen in 2004 when the Financial Services Reform Act (FSRA) was introduced.

“Our view is that the changing environment that we’re seeing play out will force the hand of a number of participants within the industry to say the next implemented change in their business is not for them,” Younger said.

“The next wave, coupled with the ageing population base of planners, leads you to think you’ll have something similar to that in terms of [independent financial planners] looking to exit the market.”

Younger also said the group was currently targeting growth, looking to hit 600 advisers within the next three years from its current base of 470 authorised representatives by taking advantages of changes within the industry.

With the changing regulatory environment, smaller firms would struggle to survive without the resources that came with the infrastructure of a larger dealer group, which would lead to additional consolidation, he said. Additionally, individual advisers would be more likely to seek the security of larger dealer groups.

Growth within Securitor would come from bringing specialist capability into the business and bringing up-and-coming planners through the ranks of Securitor firms, as well as attracting smaller firms that are less capable of standing on their own, he said.

“What we’re seeing is planners looking for true dealership from dealer groups. We’re also seeing planners looking for capability in the practice development environment which we’ve evidenced — so we’re seeing a number of people looking at joining our business,” he said.

“We think we’ll see additional consolidation within the planner market to institutional based dealer group. We see that because we think the resourcing capability around quality advice frameworks, corporatised structures — you need that scale to be able to deliver.”