CEO predicts game changers for 2014

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Connect Financial Service Brokers CEO Paul Tynan predicts two key factors that will have the most profound impact on the industry over the coming decade.
 
The first is the “almost certain” move away from the institutions by financial planners into the self-licensed environment, he told Wealth Professional. 
 
“At the moment, institutions dominate. Something like 85% of financial planners are attached to the big four banks or AMP. Either we’re going to be dominated, or customers will recognise the importance of independent advice.
 
“I mean, you know if you walk into a bank the advice you’re going to get will be about the bank’s products. I don’t think customers will be comfortable with that once they really understand, because they want independence.”
 
Tynan has been fielding more calls from advisers who see the value of independence since the FOFA changes.
 
The latest version of the FOFA legislation largely halted the sale of financial planning businesses as the interpretations of the new regulations put doubt on the transfer of grandfather revenue.
 
“People saw that if you want to protect yourself and your business in future, you need to become independent.
 
“It’s not going to happen overnight. But we don’t want financial services to be dominated by two or three big institutions; we want free enterprise and entrepreneurs focusing on giving good quality advice.
 
“We wouldn’t like our advice services to get to the stage where it’s stock-standard advice. More competition is always good – people want freedom to choose.”
 
The second key game changer for the year ahead is the increasing need for financial planners and accountants to work collaboratively, he said.
 
“For a long time it has been us and them,” said Tynan, who incidentally is an adviser and an accountant.
 
But legislative changes which make ongoing education mandatory means more work for both professions.
 
“If you tried to do both, you’ll always be educating yourself and have no time for your clients. There’s more continuous education on both sides of the ledger.”
 
Tynan noted while urban financial advisers and accountants will not have a problem sharing the workload better by working together, those in isolated country areas – where traditionally they have acted as accountant and adviser – will face increased workloads. 
  • Good advice on 19/12/2013 10:09:43 AM

    Although I agree with most things that Paul has stated, i think its fair to say, and from my own personal experiance is that ASIC do not want to see a wrath of self licenced advisors and the legislation makes it virtually impossible to operate a small licence.
    Its a catch 22 situation really....under FOFA ASIC want clients best interest at the forefront {which is understandable} but then if they see a bank or instituinal or Industry fund advisor then advice and stratey is obviously independent but product selection will always be tainted.

  • Jeff Mazzini on 19/12/2013 10:11:06 AM

    I on the other hand see the two biggest factors having an effect on the industry over the next decade is in fact technology and consumers are getting smarter and many will be able to satisfy their own needs. The issues above re planners, accountants and Finance Brokers has been a discussion for a few years now and basically if a client has to go from one person to another seeking solutions, then they will end up doing it themselves. Social media is a global and powerful platform and many consumers are becoming more open to buying all sorts of products and service online. Also the buying online process is becoming easier and the selling of products and services are also becoming more explanatory. Professional advisors have no choice but to continually up skill themselves as many consumers are already in that phase.

  • Steve on 19/12/2013 11:04:14 AM

    I agree with Jeff 100% & add that this FP industry & it's leader reps/organisations have it completely wrong in addressing its future. Clients are sick & tired of the nonsense imposed on them (cost & time) which makes their lives & ours so hard trying to get any advice. There is no way this compliance circus is good for anyone. It's time to rid the industry of this bigger the soa & the more study the better mentality. Your either an honest adviser with morals or your out. Target the bad apples & reward good advice! So simple. Listening FPA?
    Rid this industry of compliance burdens & chase bad advice, hit them hard & ban them instantly. Stop outsourcing morals to education courses & providers.

  • @BouChalmers on 19/12/2013 11:29:41 AM

    I agree with Jeff. Customers being more self informed and want to be in the driver seat themselves. Every individual wants to decide when and how they want to 'use' products and services. All information is available for everyone, so in fact everyone is becoming 'smarter'. Interesting challenge for professional FI's to stay ahead of them...

  • mark on 19/12/2013 1:40:23 PM

    what a load of twaddle, independent advisers got to 24/25% of the market and because the banks have now bought most of them they are back down to 17% we have no real representation with teeth, and the industry funds have had the labour gov blessing to dumb down the general populations knowledge, both the banks and asic want to drive out independent advisers and fpa, afa afiop or whoever have not provide us with any hope at all-this is a pipe dream, asic likes beige.

  • Innocent Observer on 19/12/2013 2:57:12 PM

    Why, in this age of red tape and compliance, would any small business want to be self-licensed is beyond me. I'd suggest that a move toward non-institutionally-aligned dealer groups is likely to continue to some degree, but the leap from that to your own license provides little if any practical benefit to the vast majority of advisers. Back-of-the-envelope calculations suggest our compliance costs are probably around half of what we would be paying if we did it all ourselves. Plus we can always rely on our dealer group's compliance team to do the leg work in keeping pace with (what seems like daily) changes to regulation/compliance. But anyway, each to their own.

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