In a statement issued Wednesday evening, Roskow Independent Advisory co-director Neil Salkow warned about the long-term ramifications of institutional consolidation of the financial planning market at the expense of “ordinary people”.
“The status quo right now needs to be turned upside down and shaken up because it is not equal,” Mr Salkow said. “Current financial planning laws favour the banks and institutions at the expense of mums and dads in the community.
“The financial institutions have much deeper pockets than us for marketing and advertising on TV and radio. But people should remember that the first responsibility of those institutions is to shareholders, not to their clients.”
Mr Salkow said these household name institutions “do not belong in the financial advice space”, echoing the increasingly popular call for product sales and financial advice to be separated – a campaign given the name of ‘SoPA’ by the FPA.
The silver lining, Mr salkow said, is that “the new generation of financial advisers have stronger ethics”, putting them in a favourable position to sustain business growth.
Contrary to most opinion I believe that the prospects have never been brighter for non-aligned financial planning groups that are genuinely committed to providing professional service. The dangers implicit in “vertical integration” are being exposed and the ongoing saga of the CommBank owned groups are creating a great scenario for IFAs to prosper – but you have got to be good. This implies advanced education and superior attention to ethics.There is no short cut to excellence.
Totally disagree. Good quality IFA’s will always do well as they don’t need to “market” their firm. The best way to grow a advisory business is through referrals from existing clients. The seas have parted and there is now nothing between institutionally aligned planners and IFA’s, which is a very good thing!
I disagree that non aligned practices will not survive. I think many years ago they said accounting practices would be affected by consolidations by the big firms. That didn’t happen and I think the smaller firms have flourished more than the big firms.
Some non-aligned licensees are established to provide quality and unbiased advice to clients. They will survive.
Some non-aligned licensees are established to build a network of advisers, drag in the FUM and flog the beast off to the highest bidder. Who cares what happens to them. It is the buyer who will suffer the consequences down the track.
Don’t worry Neil, enough of the public are a wake up that we will never be extinct.
However you have to wonder how long you would be able to represent yourself as a bank before you were shut down yet a bank can represent itself as not being a bank and trade on blissfully? With government support even.
I wonder if this SFG acquisition is actually going against the trend. Lots of independent DGs (like fortnum) are looking to buy back their insto shareholding.
Extinction? Hardly. I think the opposite is probably closer to the truth. The banks etc may have deeper pockets for marketing, but this doesn’t compare to the power of quality referrals – from happy, satisfied and trusting clients. Watch this space.
The man is a master at stating the bleeding obvious.
Being non aligned is a great for our practice, yes more changes required to differentiate between the 2, Yes some firms will not survive, but clients make the final choice, is it strategy advice or being flogged a product from a distribution network
When will the legislation make the institutions clearly show they own the Licensee’s and Adviser’s in these hidden vertical structures.
Only when this is very clear on every card, letterhead, SoA, FSG, etc and must be explained to clients, will clients really understand the limits of the advice received is focused on the products aligned adviser must sell.
I would say that there is scope for all kinds of financial services providers in the marketplace.
Perhaps it is time the legislation reflects that.