Crucial changes must be made in financial planning businesses today to mitigate and maximize future industry threats and challenges, a dealer group chief has warned.
The outlook may be "peachy", but tempus [a fictional God of war] is brewing, Australian Financial Services Group (AFS) head of strategic development Dani Peer told delegates at its business school in Melbourne late last week.
"Advisers are enjoying the good times because financial markets are in overdrive. Australians have a greater awareness of financial planning and there is a demand-supply imbalance," Peer said.
However, a potential change in government, declining financial markets, savvier clients, keener competition and the talent squeeze could become business speed bumps.
"What are your clients' perceptions of your ability to create wealth?" Peer said.
"I think the perception of the market vis-à-vis financial planners is that we are able to create wealth. If we continue to run with this perception, I think we are making a sword to fall on."
Advisers must ensure clients understand they research investments and allocate assets according to risk profile, but are not responsible for returns, Peer said.
"The Labor Party has whispered it is not in favour of commissions on superannuation guarantee contributions, so if your business is superannuation and for a lot of people it is, there's a red cloud over that," he said.
Planners were told to look at alternative business streams, like mortgages and life insurance, to make their practices business more comprehensive and relevant to their clients.
Peer said there was a real risk of advisers operating in the top end of the market losing business to accountants diversifying their services and chasing the industry's large margins.
Industry superannuation funds did not present a threat because they had snookered themselves out of the high value market, he said.
