“The whole dealer issue is becoming more commoditised,” Stackpool told ifa. “It’s going to become like Vodafone, Optus and Telstra; like Boeing and Airbus; or like the real estate sector where you have LJ Hooker, Ray White, Richardson & Wrench all really battling for diversification.”
The comprehensive service list offered by dealer groups – running from client management to social media training and personal indemnity insurance – is increasingly becoming a “white-label” for affiliated advisors, he said.
He predicted the next “evolution” in the industry will see more and more advisory practices tying up with the major dealers, “so that you end up with something that still appears to be independent in some way but is really just another branch of the dealer group.”
Stackpool’s projection of an increasingly consolidated market is not necessarily bad for the industry, he said, so long as consumers are clear about products and services.
“I’m more than happy to go to McDonald’s to buy McDonald’s,” he said, “but at the moment there’s a whole lot of ambiguity, there are lots of advisers calling themselves independent that are attached to and taking a big cheque from the majors.”
While traditionally there is “huge mental divide between the way the institutions think and the entrepreneurs running truly independent advisory practices,” many advisers are willing to put philosophy of advice aside when confronted with a “big cheque and promises of the world,” he said.
Completely agree…
Perhaps there is a market for both 1) “product” sales people and 2) professionals providing “services” and independent advice from any bias.
Or
If the Financial Planning Industry seeks to reach a “Professional” status then “product providers” and “service providers” must be completed separate – NO institutional alignment whatsoever & implement real “fee-for-service” – that is time-based billing.
Simple stuff and why the industry struggles so much with these concepts is extraordinary…
Regulation, red tape, funding purchase of businesses and the cost of running a business is pushing even independently minded advisers into joining big institutions.
The industry should find another word for ‘Independent’. Most financial planning practices cannot use the words “independent”, ‘Unbiased’ or ‘impartial’because they are either associated with a product provider or receive commissions (even a .25% trail for a cash management account).