WLM Financial (WLM) anticipates that 2013 will be another complex year for financial planners, as they work through Future of Financial Advice (FOFA) changes and try to get back in touch with clients.
Consolidation of market players and evolution of advice may also provide some interesting bylines, the company said.
"I expect large dealer groups and Australian financial services licensees (AFSL's) will be forced to operate in a more professional manner. Although with the carve outs they have obtained, I don't expect the standard will be too challenging," WLM director Matthew Walker said.
He explained that boutique businesses are likely to face more challenge from the institutions, but should be nimble enough to work ahead of the curve to deliver better outcomes.
"We may also see the continued rise of multi-disciplinary practices, such as financial planners and chartered accountants, particularly with the regulation allowing accountants to give product advice and planners to give tax advice," Mr Walker said.
"[It] makes sense to join forces, but from experience, I can tell you the regulatory mish-mash you have to go through to figure out who does what and where you report to, is challenging and time consuming."Unfortunately, the bottom line with all this is that it takes time, which increases costs, which makes the provision of advice more expensive, which takes it out of the reach of many, unless you dumb it down and provide lower quality advice. [This is] clearly not the intention, but possibly the outcome until we work through it," he said.
Mr Walker also notes a push to make changes to the way money is managed for clients in a market where there is not much alignment of interests between large fund managers and clients."Perhaps we'll see a rationalisation of fees from asset managers, although I suspect that will take some time to come, due to resistance of vested interests," he said.
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