Respondents to an exclusive ifa straw poll have indicated their bullishness on the growth of the IFA movement, with the vast majority anticipating an imminent and significant shift.
Of the 1,464 respondents, 50.3 per cent indicated they think IFAs will outnumber aligned advisers within the next two years, while 23.7 per cent said it is more likely to occur within the next decade and 3.8 per cent suggesting it may take 20 years.
Less than one-quarter of respondents (22.2 per cent) said that IFAs will “never” outnumber the institutionally-aligned sector.
Speaking to ifa, adviser Katerina Sousalis of boutique Modoras Financial Performance said that while it is difficult to predict the future, she anticipates the “pendulum to swing to the independent space”.
Lachlan Harvey, an adviser with self-licensed South Australian firm Goldsborough Financial Services, said that we are “well on the path already” if you adopt a definition of independence as “client-focused and ethical” advice, rather than the strict definition in the Corporations Act.
By contrast, Michael Radalj of Your Private Advisers – a member of the IFAAA and supporter of the Corporations Act definition of independence – said he thinks the chances of an independent majority are slim.
“I believe a large proportion of advisers are too motivated by commissions to simply walk away from them,” Mr Radalj told ifa. “For many, there is too much of a financial sacrifice to make such a change worthwhile.”
Fellow IFAAA member Simon Duigan of Core Independent Financial Advice told ifa that the size of the IFA movement is not a major issue.
“Whether it does happen, or when, is in some ways irrelevant,” he said. “I want to see us develop into a profession, and one that is trusted. For that to occur I feel that advisers need to connect, communicate and collaborate more with their clients.”
To take part in the latest ifa straw poll please visit: https://www.ifa.com.au/polls/43
All a bit of a moot point in my view. Life companies will soon be successful in riding the industry of advisers to ensure they have no commissions to pay. They will have their robots which are immeasurably easier to manage than adviser and dealers. That’s what they think now anyway. Just wait until advisers are not there to help clients with claims. Just wait until the media gets a hold of the fact that underwriting is done at point of claim for robo-insurance and the large increase in people not getting trauma and IP claims paid. Insurance companies will scramble and be apoplectic. Part of their scramble will be getting ‘real’ advisers to help mop up the mess, for the companies to be seen as ’employing professionals’ IN THE CLIENT BEST INTEREST.
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Indeed, the insurance company that can get real people to advise clients instead of robots advising them will be seen to have a clear competitive advantage. Alas, there will be no ‘real’ advisers to be found. They will be in other industries or retired. So it will all come to pass as cycles go around. This will all happen. The collective life company mistake of ‘no more commissioned advisers’ will be clear by 2025 and consumers will be calling for execs heads on a stick come 2026. A number of struggling companies will disappear or be taken over by bigger players wanting to mitigate losses by buying clients. It won’t work. The advisers will be gone and there will only be new recruits left who can fill in compliance reports and tick boxes rather well. No soft skills to help clients at all.
I’m sure Michael Radalj is very well intentioned, but he is missing the point. Inappropriate use of commissions is now managed via Best Interests Duty. It is no longer necessary to distort the definition of “independent” for this purpose.
With respect the survey was conducted by a website directed to IFA
If this was done in say an aligned dealer groups PD day the results would be exactly the opposite
Well only 50.3% said it would occur in 2 yrs, so are you saying that 49.7% would have said it would occur within 2 yrs. That is the exact opposite….
I think you’ll find that it depends on which group the aligned advisers are aligned to. One’s where there isnt much flexibility in the solutions available for use with clients are more likely to move than those who have greater flexibility in product solutions.