Financial planning groups do not need to be sheltered by larger institutions to thrive in the current market, according to the managing director of a listed advice group.
In a letter to shareholders, dated 6 July, Centrepoint Alliance managing director Tony Robinson said as the local and global economies struggled through difficult times, advisers and investors required a group that could provide "independence of choice" and quality of service.
Robinson said due in large part to the government's Future of Financial Advice reforms, Australia's advisory industry had undergone a "rash of consolidation".
"This has seen several independent groups acquired by larger players such as the banks, who are keen to sell their own financial products through an expanded distribution network," he said.
"This has resulted in fewer and fewer financial planning groups providing independence of choice."
Centrepoint Alliance stood separate from these groups, he said.
"The board and management of the company do not believe financial planning groups need to be sheltered by larger institutions such as the banks to thrive in the current market," he said.
His comments come in the same month that IOOF announced its second financial advisory acquisition.
Earlier this month, the listed financial services company informed the market it had reached an agreement with Avenue Capital Management to join the IOOF-owned Lonsdale Financial Group.
Last week, IOOF set its sights on Plan B and subsequently My Adviser. Plan B owns 93 per cent of My Adviser.
Commenting broadly on IOOF's decision to acquire businesses in a weakened market, the company's managing director Chris Kelaher told InvestorDaily: "IOOF doesn't see timing as being particularly relevant when making acquisitions, simply because we have a demonstrated record of making tactical acquisitions periodically.
"Generally it comes down to when there's a meeting of minds between buyers and sellers."
In Robinson's view, the recruitment activity across the market had created an environment unseen in the past.
"It's definitely an environment where there is more recruitment activity than I've seen in the past," he said.
Robinson questioned the methods some groups engaged in to recruit new advisers in light of the recent spate of sign-on bonuses across the industry.
"Some of the [recruitment] tools will not have the protection under the new regime [FOFA] and obviously we're looking forward to see if that changes the dynamics going forward," he said.
Centrepoint Alliance had been working hard at adviser retention across its professional investment services and associated advisory practices divisions in light of the changing times, he said.
"A major effort has been made to retain financial advisers, which management now believe has stabilised. The company now has the task of growing this base by delivering the value proposition that has at its core independence of choice, quality of services and quality of advice," he said.
As reported by InvestorDaily yesterday, if the trend of sign-on bonuses continues, financial advisers could expect large sign-on bonuses as the norm.
