A growing number of bank planners are looking to break away from institutional control and run their own business, according to Connect Financial Services Brokers, which has experienced an influx of inquiries from salaried bank advisers interested in acquiring small client books.
Changes to the remuneration models of bank planners spurred by the new Future of Financial Advice reforms mean it will be difficult for them to build a client book and recurring revenue, according to Paul Tynan, chief executive of Connect Financial Services Brokers.
“Many bank planners are disappointed with the new remuneration structures they’ve recently been presented with,” he said.
“They’re taking a long term view, recognising that if they want to give comprehensive, independent advice and build an asset they can sell at the end of their career, they have to pursue the self-employed route.”
Tynan said M & A activity across the industry was “slow” with demand for dealer groups and licensees drying up but there was still some competition for small client books, with many bank planners, accountants and mortgage brokers still keen to establish an advisory practice.
He warned advisers to avoid buying expensive books of business from institutional licensees. Instead he said there were growing opportunities to partner with accounting firms who wanted to establish a financial planning arm coinciding with the removal of the accountants’ exemption.
“Accountants realise that financial planning is a full time job and they want to partner with someone with experience to set up an advice business,” Tynan said.
“This would be an ideal solution for many advisers and certainty a better option than buying a book of C and D clients from an institution at inflated prices.
“Those who can handle the bureaucracy will stay with the institutions because they can give in-house advice without working very hard but it seems over the Christmas break, there were a lot of people sitting on the beach thinking about their options.”
