The future for financial advisers looks blurred, with most saying they expect current advice business models to become extinct, according to the latest ifa straw poll.
Of the 259 poll respondents, 77 per cent said they believe today's advice business models will eventually disappear while 23 per cent of respondents believe they will not.
Speaking to ifa, Wealth Enhancers chief executive Finn Kelly said he is with the majority because of three key factors which are placing a burden on advice practices.
These factors include "the increase in regulation and the associated compliance requirements; the increased knowledge of the consumer and the associated demands of expertise and added value; and the access to gaining a lot of the traditional 'advice' functions easily online", he said.
"In order to grow a successful company, you need to have an entrepreneurial mindset and have sound business principles. Most financial advice practices are run by someone who may be able to give good financial advice but they are not necessarily good at business.
"With the decreasing margins due to the three factors [mentioned above], these people will not be able to survive."
On the other hand, Earl Evans, Shaw and Partners' head of advice, believes at least one current model will still be around in the future – except it will be more evolved. Mr Evans expects advice firms ultimately to encompass both traditional face-to-face services and new technology.
"Certainly in our business model, I think there is a blend of a little bit of old and a little bit of new. The old being the person contact and the new being technology," Mr Evans told ifa.
"People will always, at some level, want human intervention. They will want personal advice. They'll want their hand held or some guidance. Do I think the model where personal touch and human intervention will disappear completely? Certainly not in my lifetime."
Others, like business broker Chris Wrightson, believe specialist advice models will be among the first to go. In an ifa story last month, the chief executive of Centurion Market Makers said advice practices will have to start expanding their service offerings to retain value.
"The client is time-poor and everything we've got going on, including robo-advice, doesn't save them much time," he said.
"That tells us five or 10 years from now, the client will still be time-poor and if they can get their tax and accounting advice, planning advice and cash flow advice from one provider, they'll select that rather than going to see three different advisers."
Leaders in financial services have the opportunity to widen their moats against upstart competitors. ...
The advice industry is currently in a budding phase but will “bloom in the next three to five years”, according to a new white paper. ...
ASIC has banned a Melbourne-based adviser from providing financial services and performing any function in a financial services business for six years...