Survival of the fittest in financial planning

Posted on Friday, 27 January 2012
Share on Facebook Twitter mail

The financial planning profession is set to face increased competition on a number of fronts over the coming years.

The potential challenges that the Future of Financial Advice (FoFA) reforms present financial planners with have been well documented. More recently, it was noted that the number of accountants with financial advice qualifications could more than double under proposed FoFA reforms, which would allow accountants to provide advice on setting up self-managed superannuation funds.

In a recent Parliamentary Joint Committee (PJC) hearing into FoFA, it was estimated that up to 10,000 accountants may seek financial advice qualifications over the next few years as a result of the reforms. The planned removal of the accountants’ exemption is just one example of increased pressure on financial planners as a result of FoFA.

A recent CoreData whitepaper into this issue also highlighted the fact that financial planners may be squeezed out of the industry as a result of increased competition from not only accountants, but also stockbrokers and super funds. It noted that the client advisory landscape is much more fluid now, with a number of professions all laying claim to providing financial advice.

However, there is also opportunity for financial planners in the above. The whitepaper predicted an increase in partnership type models that leverage the best of the financial planning and accounting professions. From a collaborative perspective, the two professions are highly complementary, and such tie-ups may be beneficial to planners as trust is generally high between clients and accountants.

While evolution may be hard for some financial advisers, who may choose to ‘ship out’ rather than ‘shape up’, FoFA does present the financial planning profession with a number of opportunities to run more efficient, collaborative practices with a strong focus on value.

Comments (1)

  • I think Craig has an interesting point that the very future of fnancial advisers as stand-alone businesses is under threat. There’s no doubt we will see many accountants move into the financial advice area, with a blurring between financial advice and accounting advice.

    Accountants already have the client relationships, now they only have to develop those clients into financial advice clients. It makes sense that accountants and financial advisers will work under the same roof, if not in close co-operation

Add a Comment

Latest Twitter Updates

Latest Comments

"Good article. The next question is do accountants need to bring the service in-house or ..."
Reuben Zelwer on Why industry convergence is a myth

"Vanessa, great post, I have adopted these very traits for many years and I am ..."
Max Franchitto on 5 Millionaire Traits You Can Adopt

"I love this article. So many great points. I love the part about patience. Thanks ..."
Nancy L. on 5 Millionaire Traits You Can Adopt

Find us on Facebook