Dealer group Omniwealth believes the impending Future of Financial Advice (FoFA) regulations are backing independent financial planners into a corner.
While managing director Matthew Kidd says the big players will use the industry reforms to gain volume, he concedes that Omniwealth has also fielded enquiries from financial planning practices.
“With independent dealer groups all but extinct, the feedback we are getting is many advisers feel the industry is being swallowed up by institutions and there are few alternatives,” he says.
“Independent advisers are vulnerable to losing business to larger competitors because they are so focused on providing dedicated financial planning services they risk neglecting other services that are important for clients – as well as vital to the ongoing development of their businesses.”
Despite being poised to add what he called “a significant number of financial advisers”, Kidd maintains that Omniwealth has no interest in becoming a large player.
He says the dealer group is unlikely to grow much beyond 30 planning practices.
The dealer group recently launched a new website aimed at promoting its services to advisers wanting to retain their independence in a post-FoFA environment.
With many planning practices under the Count Financial banner believed to be considering their future in a post-FoFA environment, there may yet be a gap in the market for helping those advisers who want to retain an autonomous brand.
As Evan Cooper, editor of Investment News (USA), once memorably put it: “Regardless of how successful advisers operate, they are essentially loners. They barely tolerate management, and most would admit, that they’re not great at managing others, either.”
With the impending FoFA regulations set to change the advisory landscape, it is a critical time for advisers looking to retain their independence.
“It is challenging times for advisers who face the prospect of losing their independence post FoFA,” says Kidd.
“By providing them with knowledge, best of breed services and the means to strengthen their own offerings through outsourcing, we expect to attract a significant number of independent advisers to our service over the next year.”
The firm has also established a new Omniwealth Investment Committee (OIC).
The group of senior industry figures meets once a month to discuss markets and the current economic outlook, providing advisers and their clients with regular detailed market insight.
Come on – really?
We’ve got to get over the old days!
The world the Evan Cooper’s of the world knew is back when everyone smoked and coffee was instant!
There are scores of great independently minded 30’something advisers who want to build a business, not build their egos, that will make a real impression on their ideal clients who will pay for quality advice, not quantity of product and will NEVER link up with a product provider and follow that franchised offering (not saying the franchise offering isn’t needed or valuable).
Forecasting the demise of the independent due to FOFA is similar to forecasting the demise advice due to MySuper when exactly the opposite will be true.
Maybe ( Re independents versus non independent ) but many clients wont tolerate having to deal with the impersonal and questionable level of service
Trent may be the one missing the point…FOFA was sparked by the actions of a “truly independent financial planner” firm in Queensland.
Steve,
You don’t know and I don’t know what kind of financial benefits were flowing to Storm Financial from the banks who were providing the margin loans central to their business model. To call Storm Financial truly independent without that knowledge is unjustified
Well said all previous! The pessimism of some non-bank planning businesses stems from their lack of foresight and preparation for FOFA. The writing was on the wall before we ever heard of FOFA and the future for non-aligned businesses providing advice and services that are not conflicted is very promising – once we have got through the Euro/USA problems. FOFA “best interest’ provisions will put the acid on both institutions and the ISN whose current operations are mightily conflicted. The community is not dumb – hang in there and they will come looking for planners providing genuine personal service.
I agree with everything Trent has said, which flies in the face with comments by industry lobbyists who are scared of losing their cash-cow.
This pathetically watered-down FOFA is great for us truly independents, who have been breathing this stuff for years.
Another thing – is this article journalism or an advertorial for Omniwealth?
Trent
I totally agree with you, many independent advisers are already way ahead of FoFA and have been fee for service for years. Most independent advisers saw the light several years ago and have positioned their business accordingly.
We are finding the same, that the first question we are asked by new clients is “Are you connected to a bank or insurance company?”. When the potential client finds out we have no such conflict of interest they are much happier to do business with us.
Hang on, aren’t you missing the point here? FoFA is only necessary because of the large institutions. For truly independent financial planners, FoFA will have little or no effect at all. Given this, how will FoFA threaten the existence of independents? If anything, FoFA will complement independent planners by educating society. Post FoFA, large institutions will still have conflicts of interest arising from obligations to their own products and accepting commission payments from life insurance providers. Will this ever change? Not likely. It’s only a matter of time before people start to understand how this affects the advice they receive and seek out independent planners instead. In fact, as an independent planner, i’m already getting enquiries from clients that want to specifically deal with someone who doesn’t have any obligations to an institution and who doesn’t accept commission payments from products providers. From what i’m seeing, some planners working for the institutions are starting to realise this too and consequently, I know of many that plan to start up business as independents. You need to look at it this way; FoFA represents the future advisory landscape for the large institutions, independent financial planners represent the future of financial planning as a profession.