You can bank on a challenging time ahead
There has long been a saying around the financial planning and funds management traps over the years that if the major banks ever got their act together, they'd probably clean up in this industry.
Meaning, if the banks could overcome some natural impediments (size, bureaucracy) and align their significant customer databases to the right products, distribution and service techniques, then they stood a good chance of shaking out the rest of the industry.
Well, guess what? The banks are getting their act together (at least some of them). But it has taken many years and a good deal of recruiting from within the financial services industry to now pose any real threat to traditional players.
But is it all too late? It appears not that many "traditional players" still exist. Interestingly, as banks like Westpac, NAB and Commonwealth are marshalling their forces, the so-called traditional financial services rivals are aggregating through a war of acquisition and takeover. And new rivals are appearing from non-conventional backgrounds. The mix is unclear, with the lines blurring between what were once distinct market groups.
Serious new players include the likes of Microsoft, now snapping up agreements with the world's largest financial services players. As reported in this edition of Money Management, the giant software group has signed deals, which will see it provide its users with on-line access to almost 600 financial institutions.
And Amway, the icon of pyramid selling, has released details of its foray into the life insurance market - distributing product door-to-door alongside cleaning products. Now you can not only clean the car but also purchase it and insure it against theft through the one supplier. The group has plans to sell other financial services products like personal loans and leasing products.
There never has been a more challenging time for the industry.
We have all heard about retailisation of the superannuation/wholesale funds management industry. But who would have guessed that the hitherto sleepy industry funds would compete openly for a share of their customer's wallet? News broke last week that several large industry funds are looking to provide credit cards and other financial services in direct competition with traditional vendors, including the banks.
Which brings us back to the point that banks are now getting the mix right. But they'll have to move fast to contain the more entrepreneurial players in the financial planning circles. Several planning groups have been busy yapping at the heels of the banks with their own mortgage products and other loan services.
And on the subject of alfinanz strategies, Colonial group chief Peter Smedley will be delighted to see his First State crew pick up the industry top award for funds management throughout 1998. The rise of First State has been almost miraculous. Their win is well deserved.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
