Merger and acquisition activity within the financial planning space is strengthening the competitive advantage of independent operators, according to the head of a boutique dealer group.
Many advisers involved in the mergers and acquisitions were questioning how they would like to run their businesses in the future, with independent dealer groups offering a real point of difference, My Adviser managing director Philippa Sheehan told InvestorDaily.
It had led to increased interest in joining independent licensees in recent times, Sheehan said.
“That’s where most of our enquiries come from: people who are sitting within an institution structure and are unhappy with either the merger or acquisition or are unhappy with being dictated to about how to service their clients,” she said.
“We’re more about collaborating to have something work for the adviser.”
She pointed out a number of planners belonging to institutionally-owned licensees were tired of having to use standard fact-find forms and procedures that did not necessarily apply to the client in question.
“Licensees need to be supporting their advisers more and certainly we’re seeing a trend of moving away from institutions, particularly as they are considering what they are doing under the FOFA (Future of Financial Advice) regime,” she said.
However, she said she did not see the phenomenon gaining enough momentum to prompt a noticeable shift in the proportion of independent planners compared to those operating under an institutionally-owned dealer group.
“In an ideal world I’d like to say independent financial advisers will significantly increase in number, but unfortunately greed does come into play and being part of an institutionally-owned dealer group is cheaper than being part of an independent one,” she said.
“It’s always going to be the way because we don’t have product to fund our margins, we have to charge the adviser for those, and although it is transparent, some advisers will always be led by the dollar.”
