Two distinct distribution models will exist in 2020 that will force advisers to decide the services they are best equipped to provide and to concentrate on them, a panel of financial advisers told delegates at the 2011 Association of Financial Advisers National Conference.
"We think the future holds two types of financial planning practices. The first of the business models will be niche, specialised and very fully priced," BT Financial Group head of dealer groups Matt Englund said.
"The second type of practice we see being very successful in this new world . . . are the practices that are large, multi-disciplined and corporatised."
Englund said this development would mean there would be two types of licensees operating in the market as well, with one type being institutionally aligned and the other being a collective of several smaller practitioners coming together.
Professional Investment Services group managing director Grahame Evans agreed with Englund and said in the lead-up to 2020 it was imperative for advisers to now assess their key strengths and how they would deliver those services to the market in the future.
"An essential part will be to get a little bit of 360-degree feedback as to what you are actually good at," Evans said.
These developments would create a serious challenge for many practitioners as they would struggle to fit into a corporatised model, as it was a complete contrast to the way they were currently operating, Apogee Financial Planning's Wayne Handley said.
Business Health principal Tony Stephens predicted a slightly different landscape for financial advice in 2020.
"We think there are going to be licensees that are going to be promoted through aligned markets. [So] there will be a licensee for dentists, there will be a licensee for GPs, and they will be branded licensees, they'll be branded for those particular niches," Stephens said.
