The federal government's push to bring down the average superannuation fund fee to 1 per cent or less could drive consolidation in the financial planning industry, dealer groups have said.
"The government is saying 'we want to see economies of scale and we want to see them being shared with the consumer'," Snowball chief executive Tony McDonald said.
"There is a growing awareness among financial planners that they need to hitch their horse up to someone who will deliver those economies of scale."
Snowball recently hired former Macquarie Capital corporate adviser Ashleigh Nelson to look at strategies for achieving further efficiencies, including further expansion of the group through acquisitions.
If the government's target of 1 per cent was to include financial advice, it was only realistic when it applied to simple advice, McDonald said.
But he argued it could not cover comprehensive advice for clients with more complex financial situations.
"We're already servicing medium-sized corporates where the total cost for the consumer is at or around that mark, including ongoing implementation guidance and advice," he said.
CentricWealth national head of financial planning John Hart agreed a 1 per cent fee could not include thorough financial advice.
However, he pointed out CentricWealth's clients were high net worth individuals, who looked for more complex financial planning than simple superannuation advice.
Melbourne-based SuperWorks senior financial adviser Daniel Hicks said it came as no surprise that many financial planners argued they could not provide services at the government's target, but he also argued many members probably did not need advice on an annual basis.
"Most advisers are looking to take a recurring fee, whether that is through commissions or some ongoing advice set-up. They look to tap into the client and continue to receive revenue from that client, but that doesn't necessarily have to be there," Hicks said.
"If you remove the commission and you start to stack these different providers up against each other in terms of returns, fees and benefits, that is when you start to see a natural mechanism of competition through the system and hopefully knocking out a few funds that really don't offer any value."
