The number of small boutique advice practices may actually increase under the Future of Financial Advice (FoFA) regime, says a senior wealth management executive.
ANZ Wealth’s General Manager Advice and Distribution, Paul Barrett, said he expects to see a growing number of advisers forming small, independent advice groups as the market adjusts to the post-FoFA world.
“And I’m glad that’s the case,” Mr Barrett said, “Because that’s what a competitive market needs. You need to have people creating business models that they see as advantageous to them, and I expect to see quite a bit of activity with small AFSLs.”
If you’re in a non-boutique, non-institutionally owned licensee, then the going under FoFA is definitely going to be tougher
“But if you’re in a non-boutique, non-institutionally owned licensee, then the going under FoFA is definitely going to be tougher, there’s no doubt about that.”
Mr Barrett voiced his concerns over estimates like the $11 per client opt-in costing, saying in some cases the implementation of new compliance processes could become “nightmarish”.
“I don’t think we’re (ANZ Wealth) in any danger of not delivering on the implementation. But if you think about the advisers’ business models, that’s a different kettle of fish. Every adviser’s business model is going to be different. So they (dealer groups) will have big implementation issues themselves, particularly around opt-in.”
Commenting on the current raft of acquisitions in the dealer group market, Mr Barrett told riskinfo that while many of the advisers in those licensees would be pleased with the transition to institutional ownership, some would still want to retain their independence.
“Not all the advisers in those groups are going to be happy with those acquisitions,” he said. “Because people value their independence – and there are a lot of advisers out there who do – we might see a revolt.
“FoFA is not going to kill that. In fact FoFA might see a short term spike in that.”
