The Investment Trends Planner Business Model Report – compiled off the back of a survey of more 1,000 advisers in May 2014 – has found an uptick in the number of respondents indicating their business profits have improved, up from 59 per cent to 72 per cent.
Reflecting on the finding, Investment Trends senior analyst Recep Peker suggested the rise may be partly attributable to the diminishing costs of “delivering full advice” – down from $2,400 in 2013 to $2,250 this year – as well as recovering client numbers and more favourable market conditions driving up assets under advice.
“Improvements across a range of key planner business metrics have given rise to increased optimism among financial planners,” the report states.
However, the report also found increasing tensions between advisers and their licensees with a 55 per cent increase in advisers indicating their intention to switch dealer groups in the nest 12 months, up to 10 per cent from 6 per cent.
Specifically, the report suggests that the growing dissatisfaction has been at the expense of the institutionally-aligned dealer groups, with independently-owned groups more likely to capitalise on the trend.
“We began measuring dealer group satisfaction for the first time in this year's study, and found that planners working in majority independent dealer groups had higher levels of overall satisfaction compared to those working in bank or institutionally-aligned dealer groups,” Mr Peker said.
“As expected, dealer groups that have more satisfied planners typically have a smaller proportion planning on leaving,” he added.
Mr Peker suggested more broadly that “aligned dealer group channels are at risk” and that “we may be entering a period of increased upheaval”.
In addition, 98 per cent of respondents are still struggling to demonstrate value to clients and articulate their value proposition, on top of the regulatory and compliance burdens which 73 per cent say is an ongoing business challenge.
“To improve planners’ satisfaction, a key area for dealer groups to focus on is enhancing the effectiveness of the advice and review process,” he said.
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