Advisers to become more selective on clients
Evolving demographics and regulatory changes will enable advisers to become more selective in choosing which clients they wish to deal with, according to Colonial First State (CFS).
Linda Elkins, Colonial First State's executive general manager, told ifa a number of dealer groups using CFS platforms have already modified their business models to deal with changes to remuneration requirements under Future of Financial Advice (FOFA) legislation.
“Advisers who are confident with their ability to demonstrate value to their client, or are already in a model where they’re gaining consent and charging clients fee for service, shouldn’t have too much difficulty replacing [revenue],” she said.
A “demographic bubble” of retires coming through the system will also ensure a steady stream of new people needing financial advice, meaning there is plenty of scope for new advice businesses, she added.
Upgrades to platforms and advice technology will also help advisers manage those changes through increased efficiency, improved customer segregation and enhanced customer service.
General manager of product and investments at Colonial First State, Peter Chun, said client segregation will become even more critical following implementation of the FOFA reforms.
“Advisers will be more selective who they deal with,” he said. “This retirement boom is about to explode… there’s a big wall of baby boomers that will need to seek advice [in the next 10 years].
“That core group is what advisers will focus on. If they have the right platform to partner with where they can customise their service to deal with more attractive clients, I don’t think FOFA will lead to doom and gloom; it’s actually a really positive opportunity.”