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The future of financial advice

Discussion in 'Financial Planning' started by merlinnn, 28th Apr, 2010.

  1. merlinnn

    merlinnn Active Member

    1st Nov, 2009
    Hi there everyone,

    I am interested to hear opinions of existing financial advisers out there on the implications of these recommendations to the industry once they are implemented, see here

    What will be the effect on wages and or salaries of those employed in the industry?

    Will this encourage more growth from the banks and weed out small boutique firms as the banks do not soley rely on financial advise as their main income?

    How will this effect potential employee's like myself trying to enter the industry?

    Will this make financial planning purely a service that only the elite and wealthy can afford.

    Look forward to your insights
    Last edited by a moderator: 28th Apr, 2010
  2. AsxBroker

    AsxBroker Well-Known Member

    8th Sep, 2007
    Sydney, NSW
    Hi Merlinn,

    I am expecting that some things in the Information Pack are flexible/negotiable and other things are not (eg, banning of commissions).

    The reality in any industry is that staff are given targets to reach which are linked to the profitability of a business, these targets are usually either revenue based or volume based (eg, generate x amount of revenue for the business or generate x volume of business for the business).

    I think that these may be used as negotiating tools to get across the line without any issues the banning of commissions.



    PS This is all hearsay and speculation, I don't know what the government will do.
  3. Dolfinwise

    Dolfinwise Well-Known Member

    30th Sep, 2009
    Effects on advice


    I think you can be assured that the future for the financial advice industry is brighter than ever whatever the results of the changes are. The complexity of the world is ever increasing and despite successive goverments paying lip service to making things simpler they never do. Remember Peter Costello's boast that no one would need financial planners any more after his simple super changes as an example. Rudd's latest changes will add further confusion and advice opportunities if implemented such as a slow increse in SG to 12% and a $500,000 asset limit for an increased contribution cap for the over 50s.

    Also note the demographics of the Australin population with the retirement of the babyboomers commencing bodes well for advice.

    In terms of remuneration there is every chance that as commissions are phased out (potentially on insurance as well over time) salaries will come down. However the financial services industry is extroardinarily well remunerated at the moment so this will not be the end of the world.

    Valuations of businesses are also likely to come into line with other professional service industries and profit will be the driver of what business will sell for.

    The industry is going to look very different a decade from now but if you focus on getting highly educated and knowledgeable there will always be someone willing to pay well for your expertise. Aim for a job with a firm that prides itself on exceptional advice however , not one that sit on funds under management as these buisness will have very different futures.

    Advice will in the short term be harder to afford and therefore the domain of the wealthy. Good advice does not come cheap. Hopefully however, once the industry cleans up a bit and a more professional attitude begins to prevail across the board the goverment will be able to remove some red tape that will allow the cost of advice to come down and make advice more accessible.