Connect Financial Service Brokers’ Paul Tynan has outlined what he predicts will be the two key factors that will have the most profound impact on Australia’s financial services industry in 2014 and beyond.
Reflecting on a recent past that has included significant regulatory, economic and social change, Mr Tynan says the two most significant factors for the industry in 2014 and over the coming decade will be:
- The exit of the Baby Boomer generation into retirement
- A move by advisers away from institutions into a self-licensed environment
Retiring Baby Boomers
Mr Tynan says the retirement of a generation of Baby Boomers will place tremendous pressure on Australia’s tax system, infrastructure and families.
“The need for the services of financial planning and accounting practitioners will be immense as Baby Boomers turn to these professionals for assistance and guidance as they seek to transfer a lifetime of savings, investments and value of businesses into funds required to fulfill retirement aspirations and lifestyles,” said Mr Tynan. He also stressed the critical importance for financial planners and accountants to work collaboratively in serving this retiring generation.
Self-Licensed Advisers
In 2014 and beyond, Mr Tynan believes there will be a trend that will see advisers move away from larger, vertically integrated advice businesses to boutique practices. He says this will have a significant impact on the industry as advisers will take back the ownership of clients from platforms by utilising new and innovative investments instruments that will be developed to address this demand.
“More and more planners want to be in control their own destiny and the all important client relationship, including the servicing requirements associated with those clients,” said Mr Tynan.
… for the planner of tomorrow, their most powerful marketing tool and business asset will be the provision of independent advice
“Institutions come and go, logos change, companies merge, managers leave and new ones appear, investment returns fall and premiums increase. And through all this change, the single point of contact and source of reassurance for the client is the planner.”
“Nor do planners want to be tainted and restricted by ASIC enforceable undertakings as the result of a ‘bad apple’ amongst their dealer group / institution ranks,” added Mr Tynan, who predicted that, for the planner of tomorrow, their most powerful marketing tool and business asset will be the provision of independent advice.
I think you have it correct there Paul. From my experience I would say that the exodus of the baby boomer generation from this industry will only accelerate not just because of a desire or ability to retire but also due to the toxic atmosphere that is being generated by ASIC and other players. It gets to a point where the regulatory supervision and requirements become completely onerous and any experienced professional trustworthy adviser just wants out. The business environment is tough enough without having a stifling regulatory environment on top and a climate of fear and intimidation generated by ASIC. Fortunately we may see some moderation in this approach and review of FOFA with the new government.
As for self licensing, that is the only way to go in t he long term as you at least have some control over your own operation and destiny.
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