Further consolidation of the financial planning industry will prompt a number of disgruntled advisers to break away from institutional ownership and look for new homes, according to a dealer group head.
“With the potential takeover of Axa happening out there and the rumours about PIS (Professional Investment Services), the whole industry has changed now,” Total Financial Solutions Australia (TFSA) chief executive Phil Aris told InvestorDaily.
“Strategically, it was coming back under this institutional ownership because of the results of the global financial crisis.”
As a result, Aris said the independent financial adviser (IFA) market was starting to dwindle.
“It’s getting smaller and smaller and there are not a lot of decent players out there at the moment,” he said.
“The current market looks so much like what happened in the 1980s when all the institutions started buying everybody up again and everyone was saying it was the death knell to the IFA market.
“But what then happened was people didn’t like the institutional approach and then it broke back out again and the IFA market started to grow. Consolidation always happens when you have rough times in the industry and there’s flight to security with the institutions – they may give them great deals but it’s not sustainable.”
TFSA was positioning itself to take advantage of the opportunity of those advisers looking for new homes, Aris said.
“We’re setting up our model in a way that will be very attractive to those advisers who will start breaking back out of institutions and back into the IFA market,” he said.
“There’s going to be advisers not happy with that institutional model, so I think we’re well positioned to take a big bite of that in the future.
“Some of the initiatives we’re talking about with Count will also add another feather in the cap to attract these guys over.”
The merger between TFSA and Count Financial is expected to be finalised by the end of February.
