Speaking on a recent episode of the ifa podcast, founder and director of Forte Asset Solutions, Steve Prendeville, drew attention to the heightened level of quality in the advice industry.
Post the exit of the banks, Mr Prendeville flagged that a greater sense of trust and confidence has been afforded advisers by consumers.
“We’ve now flipped over from 70 per cent being controlled by institutions and oligopolies just manufacturing homogenous advice for all to well over 60 per cent independently owned practices,” Mr Prendeville explained.
“I believe that immediately because of that, the trust deficit has been rebuilt, the need for advice has never been greater nor has the quality of advice been better,” he continued.
According to Mr Prendeville, this surge in quality was also helped by heightened education standards.
“I think with degree qualified advisers, experienced CEOs and chairpersons, that we’ve got also greater quality and control being exhibited within the businesses. We’ve got vigilant authorities, but we’ve also got the removal of conflicts and improved transparency,” he explained.
Part of that approved transparency, he said, is owed to fixed fees.
“Over 80 per cent of the business has moved to fixed fees. From a valuer’s perspective what that does, is it takes out markets and economic movement or volatility within a business’s revenue or profitability,” Mr Prendeville explained.
“So, what we’ve done over the past three years is actually build better businesses that have been basically focused around client needs and wants, and the ability to meet that,” he noted.
Touching also on the reduced number of advisers in the marketplace, Mr Prendeville said that despite the exit of some 10,000 advisers, the overall quality has increased.
“The vast majority of those were accountants that were trading with exemptions primarily on the self-managed super fund space. The second cohort was salary bank advisers, and the third was businesses that were, in most cases, under $400,000 and heavily exposed to grandfathered revenue,” he explained.
“What we’ve got is the core of the advice community is still in place.”
To hear more from Mr Prendeville, tune into our podcast here.
