Consumers will twig to independence
With the focus currently on vertical integration among advice providers, the end consumer doesn’t really understand the changes happening in the industry but would prefer independent advice if asked.
That is the view of Kenyon Partners managing director Paul Tynan, who was responding to recent coverage in ifa in which Wealth Within chief analyst Dale Gillham suggested mum and dad investors could lose access to independent advice.
“If every consumer starts to understand what’s really happening out there, they’re not looking to buy proprietary products. Consumers will flock to independent providers,” he said.
“The consumer hasn’t twigged to the changes, I don’t think they have a clue and all these changes that have forced vertical integration haven’t been a top priority for them.
“One day it will twig; if they go into an industry super fund [and find out] it’s about keeping them in there, and banks will only offer proprietary products.”
Tynan said there is currently an appealing space out there for advisers who can say they are not product providers but give real advice.
If you ask a group of people around a BBQ, they would say they don’t know what sort of financial advice they would look for, but if prompted most would say they would want advice independent of product, he said.
He added that in terms of platforms and technology, the bigger providers – the banks and large industry funds – don’t have any room to move and they could be the ones to lose out given the speed at which technology is moving.
“It’s the one area where the smaller ones will be up there and be able to make a good living because of technology,” he said.
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