The future for non-aligned advice firms is “strong and positive” as long as there are “thinking clients” whose needs extend beyond advice driven by the needs of product manufacturers, according to John McMurdo, group managing director of Fitzpatricks Financial Group.
McMurdo, a former managing director of Hillross Financial Services (owned by AMP), says there is growing demand for advice that is not provided by parties ultimately prosecuting the agenda of a third party – a product manufacturer.
“All of the research we see points to the ‘thinking’ client wanting to have impartial and client-centric advice,” McMurdo says.
“Yet with the consolidation of the market over the last decade or so, the supply/demand curve for that advice is heavily out of whack. So for those able to deliver in that space, I see it as a very, very positive environment indeed.”
McMurdo says a key difference between aligned advisers and non-aligned advisers is that the non-aligned cohort starts with the clients’ needs and then defines advice solutions – including investment solutions – whereas aligned advice tends to start with the manufacture of a product and then is viewed as distribution for that product.
“The advice may be fine, may be appropriate, but it frankly is often to bring effect to the event of a product sale,” he says.
McMurdo says professional advice can be provided profitably without being propped up by investment solutions, including platforms.
“I’ve seen this for a number of years now,” he says. “It’s not absolutely necessary to provide other services, including investment management.
“That said, I think it’s also appropriate where it’s in the clients’ needs and their interests for that money to be managed and managed well.”
To watch a short interview with McMurdo, click on the video below.