Independent financial advisers need independent products, if they are to survive the Future of Financial Advice reforms, according to analyst Dale Gillham.
Speaking to ifa, the executive director of Wealth Within said that the future of independent financial advisers is reliant on the support of the industry, including the provision of "independent" products.
“I think there is an exciting future as long as they’re supported,” Gillham said.
“To me, you need to have products and services that aren’t aligned by the big providers and you need to have advisers totally separated from the products and providers.”
“Then you’re going to see a whole lot more independent financial planners being able to run a business and actually make some money without being dictated to on how to do their business by the big end of town. “
Gillham said consolidation is an “inevitable” consequence of the FOFA, with the reforms increasing strain on independent advisers when it comes to running their business.
He said that with 80 per cent of all money in platforms under control of the big four bank and AMP, consolidation in financial services will have negative consequences for consumers.
“With advisers going for a fee for service, they’ve got to have a lower cost model to run their business to be able to drop their fees. And they’re not getting that while its being controlled by the big end of town,” Gillham said.
“The more competition you get the lower the fees will become and the better services will come out.”
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