Relationship model re-emerging in advice space
Mid-tier dealer groups will have to support their financial advisers in creating different value-adds in the new regulatory environment to remain competitive, according to head of Guardian Advice, Simon Harris.
Harris was part of a discussion panel at the Association of Financial Advisers National Conference in Queensland, which delved into the current issues faced by licensees, big and small.
When asked what the mid-tier sector will have to do to compete with large institutionally-owned dealer groups, Harris said he saw two trends emerging, the first being a move back to the relationship-based business model.
"The other trend I'm noticing is…if we think about regulation, if we think about fee disclosure, for example, there's a need for advisers to better articulate value to their clients - and that might mean more actively managed portfolios," Harris said.
"For someone running a licensee, that scares the hell out of me - that I'm going to have advisers out there picking stocks instead of seeing clients," he added. "There is a place for dealer groups to create actively-managed portfolios and support that value-add to customers."
Forte Asset Management founder Steve Prendeville said some dealer groups would probably emulate the business model of larger institutions to survive the challenges of the future.
"The smaller groups will start to get involved in the full scale value, not just at the advice and the distribution part, but will also come to the platform and manufacturing space," Prendeville said.
"I think that's where the medium-size, smaller-size players will take on the larger ones, which somewhat copies their business model."
The panel, which also included Infocus Wealth Management founder Darren Steinhardt and chief executive officer of Lonsdale Financial Group Mark Stephen, concluded that the consolidation in the boutique space would continue in the next three-to-five years, and that the independent, mid-tier dealer groups would continue to be under pressure.
AUTHOR
Staff Writer
Recommended for you
A panel of commentators have emphasised working in a support or administrative role, such as in a call centre, need not be a step backwards and can provide valuable experience for future advice roles.
The FAAA’s Phil Anderson has said the delisting of E&P Financial Group won’t stop the company coming under scrutiny in the public inquiry.
A judge has dismissed an appeal by former Linchpin Capital Group director Peter Daly against a $150,000 penalty for breaching his duties as a director.
E&P Financial Group, former parent of Dixon Advisory, has formally requested to delist from the ASX, with the company noting the negative impact of regulatory proceedings on its share price.
