Chris Gordon sends a Wealth Management Market update to his clients every quarter. This is the update he released on 5 July 2016.
- Scaled / Phone Based Advice. Banks, Independent Advisers and Industry Superfunds are investing, growing or starting-up Scaled Advice / Intra-fund advice teams.Cbus has launched a new Financial Advice service and is looking to attract up to 30 phone based Advisers in Melbourne.Rest Super are also currently recruiting phone based Advisers and the Banks continue to grow and recruit extensively.The main contributors for scaled advice are superannuation contributions, insurance cover, TTR clients or intra-fund clients covering investment options. Since the introduction of FOFA, scaled advice has grown rapidly, with 27 per cent of planners providing scaled advice in 2010, growing to almost 90 per cent of planners in 2015, with most Advisers using scaled advice to provide ongoing service to existing clients.
According to Investment Trends, scaled advice saves 33 per cent of an Adviser’s time, but they only receive half of the revenue compared to comprehensive advice.
- ASIC has accepted an enforceable undertaking from HSBC Bank Australia after a surveillance found Advisers were giving “potentially deficient advice” on products. The corporate regulator said the EU will see HSBC review and remediate clients who were advised on retail structured products between January 2009 and March 2013.
- Extra ASIC funding to boost advice surveillance. The $127.2 million reform package to strengthen ASIC will allow for “major shadow shop” operations and other projects in the financial advice and life insurance sector.The corporate watchdog has said it will equip ASIC with the stronger powers and funding that it needs to combat misconduct in the financial services industry. ASIC deputy chairman Peter Kell said that extra funding will allow for a “series of extended additional projects”, including shadow shop operations in which an ASIC member poses as a consumer.
- IRESS’ advice and wealth management platform XPLAN has been named the number one Australian financial planning software by research house Investment Trends for the ninth consecutive year.XPLAN achieved a 94.3% score – the highest score in the eleven years of the report – and led in the five categories of client management, advice provision, portfolio management, practice operations and integration.
- Crestone Wealth Management, a company established by former UBS Wealth Management Australia employees, opened for business recently with $14 billion in assets under management. The employee-owned firm has 170 employees, including 70 Investment Advisers. It has offices in Brisbane, Melbourne and Sydney.
- Research commissioned by ING Direct has found that there is no clear demand from millennials for robo-advice. 80 per cent said they prefer face-to-face advice relationships.In a report titled The truth about Gen X and Gen Y, ING Direct found that contrary to common assumptions, Gen Y prefer face-to-face advice over robo-advice. ING Direct head of third party distribution Mark Woolnough said, “It’s refreshing to see that the more digitally-savvy younger Australians recognise the value of face-to-face financial advice.”
Changes to senior leadership:
- Bruce Edwards – new Chairman at Clearview
- Jasia Fabig – new General Manager at MLC Advice
- Harry Mitchell – new Chief Executive at Mine Wealth + Wellbeing’s
- Andrew Dunkerley – new Head of Advice at Local Government Super
- Gary Weiss – departing Chairman at Clearview.
Projections for the next 6 months?
- Compulsory association membership. In new submissions to Treasury, the FPA and AFA have called on the government to make changes to the Adviser education standards draft, including adding flexibility to the proposed exam and making it mandatory for Advisers to join professional associations.The latest submissions come after the government announced in April that it had revised the draft legislation with changes to the degree requirement as well as the timeframe Advisers will have to meet the proposed standards. However, continuation of education standards is still a main aspect with the majority of Adviser roles from Banks through to IFAs still needing a pathway to gaining CFP.
- FinTech/RoboAdvice initiatives and launches complementing traditional face-to-face models.
- Phone based and video conference advice models continuing to grow and develop.
Hot spots – type of product or level/seniority or specific skill set:
- Advisers with a prerequisite for language skills (Languages in demand are Cantonese, Mandarin and Vietnamese).
- Female Financial Advisers and Female Advice Managers.
- Phone based Advisers providing scaled advice on Insurance, Investments and Super.
- Advice Review/Audit/Investigations. Businesses/Banks continue to grow numbers gradually and still seems to be a common trend for the foreseeable future.
- Xplan – platform developers, configurators, helpdesk and trainers. A lot of businesses taking on candidates with the scope to upskill due to the candidate shortage.
- Paraplanners, more businesses continue to outsource due to the Paraplanning candidate shortage with most large organisations currently having numerous vacancies.
Remuneration: what’s happening with salaries?
- Regional Manager – Industry fund/Banks – 5+yrs experience, salary range $170k – $200k base + super + bonus
- Regional Manager – Industry Fund/Banks – 3-5yrs experience, salary range $140k – $170k base + super + bonus
- Regional Manager – Industry Fund/Banks – 1-3yrs experience, salary range $120k – $150k base + super + bonus
- Financial Planning/Practice Manager – 5+yrs experience, salary range $160k – $220k base + super + bonus
- Financial Planning/Practice Manager – 1-5yrs experience, salary range $120k – $180k base + super + bonus
- Practice Development Manager – 5+yrs experience, salary range $180k – $200k base + super + bonus
- Practice Development Manager – 3-5yrs experience, salary range $140k – $180k base + super + bonus
- Practice Development Manager – 1-3yrs experience, salary range $110k – $140k base + super + bonus
- Senior Financial Planner with CFP – 5-7+yrs experience, salary range $120k -$165k base + super + bonus
- Financial Planner – 3-5yrs experience, salary range $80k – $120k base + super + bonus
- Financial Planner – 2-4yrs experience, salary range $70k – $110k base + super + bonus
- Junior Financial Planner – 1–2yrs experience, salary range $60k – $80k base + super + bonus
- Senior Paraplanner – 3–5+yrs experience, salary range $80k – $110k base + super
- Paraplanner – 1-3yrs experience, salary range $60k – $80k base + super
- Senior Compliance Manager – 5+yrs experience, salary range $160k – $200k base + super
- Compliance Manager/Specialist – 3-5yrs experience, salary range $140k – $160k base + super
- Compliance Manager/Specialist – 1-3yrs experience, salary range $100k – 140k + super
- Review/Compliance/Case Manager – 5+yrs experience, salary range $160k – $180k base + super + bonus
- Review/Compliance/Case Manager – 3-5yrs experience, salary range $130k – $150k base + super + bonus
- Review/Compliance/Case Manager – 2-3yrs experience, salary range $90k – $120k base + super + bonus
- Review/Compliance/Case Manager graduates, salary range $60k – $80k base + super + bonus
- Client Service Manager – 3–5+yrs experience, salary range $60k – $80k base + super
- Client Service Manager – 1–2yrs experience, salary range $55k – $65k base + super