Convergence goes in cycles: lawyer
The convergence of financial planning and other financial services such as mortgage broking and accounting is cyclical and expands and contracts over time, according to an industry lawyer.
Speaking to ifa, Rockwell Olivier managing principal Peter Bobbin cited the big four accounting firms as an example of how convergence “goes in cycles”.
“What used to be the big eight are now the big four accounting firms,” Mr Bobbin said.
“In strong economic times before the GFC they abandoned their private client services areas,” he said.
“In the middle of the GFC when there was no transactional work around, they took on private client services.”
Financial planning groups have been facing significant competition from the big four after seeing them bring on private client services, Mr Bobbin said.
“The only way to face that competition is to respond in like manner,” he said.
“I have seen over the years the expansion and contraction of financial services through convergence and it is very much cyclical in that way.”
The convergence of the financial planning and mortgage broking industries is on the rise.
According to the 2014 ifa Financial Services Convergence Report, 72.1 per cent of surveyed respondents believed convergence was feasible, while 44 per cent were confident that most advisers will offer mortgage and debt advice within the next five years.
Mr Bobbin sees convergence as a “no-brainer”, with FOFA being the key driver.
“Advisers have had to sit down and justify their fees,” he said.
“Pulling in the other services is an important part of that.”
Of the 289 financial services providers surveyed by ifa, 79.1 per cent think it is a true proposition to be able to offer solutions – including mortgages – for all their clients’ financial needs.
AMP to introduce annual advice agreements
AMP has announced it will introduce annual agreements for clients who currently ...
Only one in four retirees seek advice, report finds
New research has found that only one in four people aged 65 and over actively se...
Praemium adds three model portfolios to SMA
Advice platform Praemium has broadened its range of model portfolios on its sepa...