While he believes AMP’s exit has been coming given the challenges faced by heavily vertically integrated, product-focused firms, Eugene Ardino views the departure of big institutional players as a challenge for the profession.
“I think it’s going to be challenging for the industry not having big institutional players, because they’re in a better position to be able to fund things that need things like technological advancement, an academy-type environment for new entrants,” the CEO of Lifespan said on a recent episode of the ifa podcast.
“I mean, who’s going to take on, you know, who’s got the capacity to take on all these people that we want coming into the industry as new entrants? You know, it’s hard for advisers. We’ve got five or 10 within our group, but it’s harder for smaller firms that don’t have the deep pockets. So, I’ve got mixed feelings about it.”
Last month, AMP announced on the ASX that it has entered into a strategic partnership to offload the majority of its stake in three licensees and its Jigsaw offering, while also selling off its minority stakes in 16 advice practices.
Speaking with ifa, AMP chief executive Alexis George said the “world is changing, and we need to change as well”.
The CEO explained that prior to making the decision, AMP engaged in extensive consultations with its advisers and firms, which resulted in a unanimous decision that it was time for the firm to end its 175-year history in advice.
According to Ardino, while heavily vertically integrated product-focused firms have faced multiple challenges over recent years, those still thriving have prioritised advice over product.
“I’m not against vertical integration. I think vertical integration is a big part of the advice community. Most particularly bigger advice firms, whether licensees or not, provide other services to their clients, whether it be accounting, mortgage, broking, real estate, et cetera, et cetera. So much of the industry is vertically integrated, but I think what separates some of them is the core of a lot of the groups that are still there and thriving is advice rather than product,” Ardino said.
“I think that’s important. If I think about what has been very different about the vertically integrated groups that haven’t made it work and those that have, I think that’s a big part of it. If the core of what you do is being an adviser and looking after the client, and then you’ve got other products and services that you make available, I think it can work better.”
To hear more from Eugene Ardino, click here.
Hesta, Hostplus AwareSuper. They’ll be flooding in from call centres around the world, getting their 4 hours of training and providing advice over the phone and they’ll be called Qualified Advisers.
Have you been asleep at the wheel Mr Ardino?
Theyre leaving and handing over the CSLR cost to the advisers that are left.
AMP finally got the memo – the advice world is changing
To employed “Qualified Advisers” selling in house products all paid for from the Admin fee?