The repercussions from what is being termed a great “land grab” for planning practices and dealer groups will be felt for a long time in terms of the structure of the financial services industry. But the jury is out on how this will impact on clients.
Do planners who belong to a dealer group which is owned by a large institution behave any differently to those who belong to an “independent” dealer group? The answer is ‘yes’ but that it is not to say that they behave better or worse.
This is one of the issues to be discussed at the No More Practice Live conference, with three heads of major dealer groups being quizzed on their views. They are Matthew Englund of BT Financial Group, Steven Davison of Genesys, and Mark Ballantyne of Financial Wisdom.
The owners of those three dealer groups – respectively Westpac, AMP and Commonwealth Bank – account for a big share of the advice industry. But what of the advice their planners give?
The little evidence which is available suggests that such planners are more disciplined in their approach to providing a plan; less likely to deviate from a script given certain client information. They are also more disciplined in eliciting the relevant information.
The good part of this is that they are probably less likely to make a mistake or give “bad” advice. The less good part of this is that the lack of flexibility means they may miss a truly unique case which should get a truly unique strategy.
One interesting question is whether such institutionally guided planners are more or less likely to use managed funds and possibly less likely to recommend an IMA or direct shareholdings for their clients.
Clearly, from the decline in total managed fund assets which has occurred in each of the past three years, there appears to be little correlation between the two, at least at aggregate level.
