Planners remain resilient to changing landscape

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The financial advice industry remains resilient to the many challenges facing it, despite more compliance and regulatory requirements on the horizon. 

This was one of the key findings from the Investment Trends 2019 Licensee Satisfaction Report, which shows that only 11 per cent of planners say they intend to leave the industry if the full recommendations of the Royal Commission are implemented, while 7 per cent say they will cease providing advice when FASEA’s education requirements come into effect in 2024. 

As planners adjust to this new regulatory regime, the affordability of advice is also a growing concern. Significantly, more say they are facing obstacles in providing affordable advice (43 per cent, up from 33 per cent in 2018) and reducing the cost of advice (39 per cent, up from 27 per cent).

“While heightened regulation will add time and cost pressures to their business, the vast majority of financial planners have no plans for leaving the industry,” said Recep Peker, Research Director at Investment Trends. “However, planners recognise the need to evolve their business not only to satisfy regulatory standards, but also to meet the demands of shifting consumer preferences and an uncertain investing climate.”

When asked how the Royal Commission will impact their planning practice, 69 per cent of planners intend to accelerate their adoption of technology to better serve their clients. 

“By using technology more effectively, planners believe they can enrich their client engagement capabilities, helping them better demonstrate value to existing clients and to expand their pool of potential clients,” Peker said.


The trend towards self-licensing is also increasing rapidly, with 24 per cent of planners now saying they either operate their own AFSL or belong to a self-licensed boutique (up from 15 per cent five years ago). In the next 12 months, a further 10 per cent say they intend to take the same route. 

“More planners are moving away from the traditional licensee model, believing they can deliver better outcomes for the end-client by taking full control of their operating environment, value proposition and product set,” Peker said. 

While self-licensing provides planners with greater autonomy, it also comes with greater responsibility that often requires a more hands-on approach. This highlights why the vast majority of self-licensed planners (85 per cent) rely on external support to operate their advice business, particularly for compliance/audits, professional development and research. 

“As more planners consider self-licensing, we expect to see growing interest and utilisation of solutions that can satisfy their wide-ranging needs. At present, there is already widespread awareness of solutions such as BT Open, Centrepoint Alliance and IOOF Alliances, as planners weigh up their self-licensing options,” Peker said. 

Dealer group model

However, despite the attraction of self-licensing, most planners indicated they will continue to rely on the dealer group model, with over half (55 per cent) intending to remain with their existing dealer group. A further 10 per cent intend to switch to another dealer group within the next 12 months. 

“Dealer groups remain the backbone of the financial planning industry, and many planners believe that the support, guidance and services provided by their dealer group outweigh the self-licensed model,” said Peker.

“Still, dealer groups can do more to support their network of financial planners. Among those who are part of a dealer group, nine in 10 (91 per cent) seek further assistance from their dealer group – from support with improving back-office efficiency to ongoing client engagement.” 

Peker added that ongoing client engagement should be a top priority for planners, as the Investment Trends research shows that those who currently invest more to develop their digital client engagement capabilities, are also the industry’s most successful by revenue, profitability and client growth.

“These successful planners are reaping immediate and tangible benefits of placing their clients at the centre of their business, highlighting the need for greater collaboration between planners and their dealer group to deliver better outcomes for the end-client,” Peter said.

The Investment Trends 2019 Licensee Satisfaction Report is based on an in-depth study of 1,030 financial planners concluded in May 2019.

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