IFAs ‘ceding ground’ to institutions

The global independent advice movement has gathered steam in recent years but must find a new competitive edge or risk losing clients to a savvier big end of town, says the CEO of a $21 billion FUA advice firm.

In an interview with ifa at the AMP headquarters in Sydney, United Capital founder and chief executive Joe Duran said that while independence has been a strong factor in growth, many independent firms are still attempting to compete “on the same language and the same terms they used to a decade ago”, and cautioned this needs to change.

“The competitive advantage that the independents used to have is no longer true,” he said. “The independent advisers are ceding ground without even realising it.”

Ten years ago, non-institutional advisers were able to compete by offering lower fees and more than just proprietary product, Mr Duran said, but in the intervening time the large institutions (referred to in the US as ‘wirehouses’) have closed this divide.


“Even worse, they’re not making any investments on improving the client experience in a way that will allow them to be competitive in the future,” he said.

“The best test of whether you’re doing well is whether you’re growing – it’s the ultimate asset test. What I have seen world-wide is the vast majority of independent advisers have flatlined.”

Mr Duran said there is “still a lot of new money flowing in” to the industry, but non-bank practices were not often capturing this or acquiring new clients.

“If you’re not getting new clients, it says that something you’re doing isn’t particularly working,” he said.

“It might be enough to hold on to your existing clients but you’re not doing enough to bring in new ones, and that’s usually the beginning of atrophy in business.”

Mr Duran is in Australia to speak at the AMP Advice Summit in Sydney. His tour follows ifa’s revelation that United Capital has been a partner and adviser to AMP in the development of its ‘goals-modelling engine’.

The full interview will Joe Duran will feature in the next episode the The ifa Show podcast. 

IFAs ‘ceding ground’ to institutions
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