Convergence goes in cycles: 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.