Kaizen Recruitment Hosts Wealth Management Leaders’ Round Table Discussion

Kaizen Recruitment recently hosted the first in a series of  luncheons for leaders in wealth management.

The meeting drew together representatives from a range of wealth management and fintech firms, with the aim of providing a networking forum for senior professionals, and an opportunity to share and examine current environmental challenges.

Kaizen Recruitment sincerely thanks Mark Horton Andrews from IOOF for chairing our event and also thanks senior wealth management professionals from Mercer, Anne Street Partners, DPM Financial Services, Clover, IRESS and JB Were for their participation and their candour.

With the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services making most of the recent newspaper headlines, a few hot topics were discussed, and several themes emerged.

NEXT GENERATION OF ADVISERS

• The newly proposed education requirements made by Financial Adviser Standards and Ethics Authority (FASEA) is likely to have a direct impact on financial advisers exiting the industry because the average age of financial advisers is between 51 – 53.
• Returning to study will not appeal to many finacial advisers, especailly those who are due to retire in the next five to ten years.
• One person noted “the perfect storm is brewing” with another senior adviser suggesting there should be two tiers of education standards, a basic level for intra-fund advisers and an advanced level for holistic financial advisers providing complex advice.
• Should financial advisers not meet the FASEA education requirements, they need to be adaptable, perhaps take on management or mentor roles.
• Some firms are registering younger advisers this calendar year in anticipation of FASEA changes.

GENERAL CLIMATE

• Community confidence in financial advisers has rapidly declined because of negative publicity from the royal commission.
• Financial advisers from the big four banks and AMP are moving to non-vertically aligned or independent licensees.
• Business challenges include decreasing revenue, increasing compliance (costs), increasing salaries.
• The cost of providing financial advice will significantly increase post FASEA changes.
• Industry super funds are paying above-average salaries to financial advisers and independent firms are finding it difficult to compete on remuneration.
• The wage growth of paraplanning over recent years is a direct result of the demand from bank and AMP remediation programs.
• Financial planning book values will cheapen as advisers leave the industry.

OUTSOURCING

• Most firms are only outsourcing basic statement of Advice (SoA) documents as outsourced paraplanning providers don’t have the knowledge or experience to write complex SoAs.
• Concerns – cost, training, quality (holistic advice), templated approach.

TECHNOLOGY

• Technology is ripe to disturb the high salaries of paraplanners and the challenge to find talent.
• Technology may solve manual and compliance burdens and free up advisers to focus on spending more time with clients.
• Advisers are using client engagement applications like MyProsperity and Money Soft to gain greater engagement from their clients and clients’ children.
• Robo advice delivers consistency and is an effective tool to engage people and start the conversation however customers ultimately tend to want to interact with people, espcailly with their finances.
• Advisers are starting to present SoAs via a video in conjunction with a written SoA as an effective means for greater client engagement.
• Large corporates have spent significantly but still working to deploy and end-to-end solution.

INTERGENERATIONAL ADVICE

• Advisers are concerned the next generation of clients will be will be more savvy when choosing a financial adviser, and will typically look online for such services.
• The succession of the client relationship is at risk because children aren’t thinking, “I will visit my parent’s financial adviser.”
• Technology can be an enabler to engage the next generation of clients.

FUTURE DISCUSSION TOPICS ON THE RADAR

• Compliance burden
• Controlling the cost of advice
• Data governance
• Investments (how investing and what resources)
• Royal Commission – outcomes
• Productivity Commission (superannuation) – outcomes
• Business models (retail/wholesale only)
• Longer-term prospects for Insurance Commission based practices

This post does not necessarily reflect the views of any individual present.

For all your wealth management recruitment needs, please contact the team at Kaizen Recruitment on 03 9095 7157 or info@kaizenrecruitment.com.au.

Kind regards,

Matt McGilton – Director

Kaizen Recruitment specialises financial services recruitment across funds management, wealth management, superannuation, investment consulting and insurance. We are based in Melbourne and Sydney. For assistance or further information please telephone our office at +61 3 9095 7157 or submit an online form.

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