The financial planning profession is set to face increased competition on a number of fronts over the coming years.
The potential challenges that the Future of Financial Advice (FoFA) reforms present financial planners with have been well documented. More recently, it was noted that the number of accountants with financial advice qualifications could more than double under proposed FoFA reforms, which would allow accountants to provide advice on setting up self-managed superannuation funds.
In a recent Parliamentary Joint Committee (PJC) hearing into FoFA, it was estimated that up to 10,000 accountants may seek financial advice qualifications over the next few years as a result of the reforms. The planned removal of the accountants’ exemption is just one example of increased pressure on financial planners as a result of FoFA.
A recent CoreData whitepaper into this issue also highlighted the fact that financial planners may be squeezed out of the industry as a result of increased competition from not only accountants, but also stockbrokers and super funds. It noted that the client advisory landscape is much more fluid now, with a number of professions all laying claim to providing financial advice.
However, there is also opportunity for financial planners in the above. The whitepaper predicted an increase in partnership type models that leverage the best of the financial planning and accounting professions. From a collaborative perspective, the two professions are highly complementary, and such tie-ups may be beneficial to planners as trust is generally high between clients and accountants.
While evolution may be hard for some financial advisers, who may choose to ‘ship out’ rather than ‘shape up’, FoFA does present the financial planning profession with a number of opportunities to run more efficient, collaborative practices with a strong focus on value.
