However, if the murmurs doing the rounds of the industry are correct, many principals and advisers alike are considering jumping ship to take advantage of the government’s post Future of Financial Advice (FOFA) activity.
Many participants have said it’s not uncommon for there to be a spike in activity in the wake of regulatory change, or in the modern day industry’s case, looming regulatory change.
Of course, it makes sense to poke your head out and see what’s happening over at your neighbours once in a while, yet how difficult is it to change licensees? And what are the benefits and pitfalls of making such a move?
In this week’s cover story, IFA spoke with industry participants about such questions.
The general feeling among wealth managers Colonial First State, MLC and financial advisory group Fortnum Advisers is that there is much activity in the marketplace with groups looking to pull up stumps and move, but they are taking a wait-and-see approach.
“There are a bunch of practices looking to see what happens with FOFA and deciding whether they need to be inside or outside,” Fortnum Advisers executive director Ray Miles said.
Paragem managing director Ian Knox said the last major period of consolidation was between 2002 and 2004 with the implementation of the Financial Services Reform Act.
“We have not seen a lot [of consolidation] since then. ING has been buying a lot of businesses through Millennium3, which has increased its headcount,” Knox said.
“We have seen the arrival of Shadforths and Centric as aggregators and more recently growth with Wealthsure.”
However, despite thoughts of exiting a group, the reality is it’s a difficult choice to make.
“It is a tougher decision for a planner to make any decision to move when you have a lot of unknowns,” Colonial First State advice business general manager Marianne Perkovic said.
Miles said: “A dealer has got to be doing something really bad. It is very painful for businesses to leave dealer groups. They shouldn’t lose them if they care.”
What are your views on consolidation at present? Do you believe once the implications of FOFA are better understood there will be greater movement in the industry?
