Cost cutting measures by financial services companies may play out for another six months with companies concerned about what effect the staff culls may have on their ability to comply with the Future of Financial Advice reforms.
Centurion Market Makers director Chris Wrightson said there is concern in the market about how to solve issues surrounding scaled advice and conflicted remuneration system following staff cuts.
"Most are cutting costs. So how do you take people out of the system but solve [scaled advice and conflicted remuneration issues]," Wrightson told InvestorDaily.
"You've got to put some effort in over here, and there has got to be some business solutions coming out of that which will require investment, but at the same time you have to take people out of there."
He said what he expects, and has seen other industries, is companies will cut costs with a very short term view, making the roles redundant that are not immediately needed, and then employing people again in around 18 months time.
"I think most are overweight by about 10 per cent on costs. So they're going to have to cut out a fair bit," Wrightson said.
"[It is] probably a three to six month exercise to get it all out. At the end of that, what then? Well if markets haven't turned around then it's going to be hard to implement, if they can't bank on markets.
"[I think] costs are going to come out then there will be another decision in about six months I think about what happens next."
