Financial advice: change and growth
Renato Mota, Group General Manager – Wealth Management
As we look forward to another year where the advice we provide will be influenced by fresh changes to super, I sometimes wonder if there’s any other industry so affected by Government reforms? When I think about how far financial advice has evolved over the years, however, it’s clear that change is an inherent part of the industry we are in.
It was the demand for change that saw financial advice emerge in its own right from the 1960s stockbroking and insurance ‘salesmen’, who had little regard for the goals of their clients, and even less concern for monitoring their progress towards these goals. As more people recognised the value of a comprehensive financial plan in achieving their goals, so financial advice continued to grow.
Now advice is intimately tied to all financial aspects of our clients’ lives, from budgeting and wealth accumulation to retirement and aged care. In 2017, financial advice is a $4.6 billion industry, with 25,000 advisers serving 20 per cent of Australians.
Change and growth
Looking ahead, it’s safe to say our industry will continue to face change – and continue to grow. In just the next few years alone, baby boomers will retire in increasing numbers, and live longer. This will shift the spotlight to ‘retirement planning’ – that is, advice designed to achieve financial independence for every stage of retirement.
The Government is recognising – and supporting – growth in this area. In December 2016, they released a discussion paper on Comprehensive Income Products for Retirement. In a sign of their commitment to these new financial products, they have even invented a consumer-friendly moniker – ‘MyRetirement’. With submissions on this discussion paper closing 28 April, we may even see legislation this year on MyRetirement products.
At the same time, much has been written about Brexit, the US election and the shift away from traditional left-right politics. The uncertainty this will create will raise the profile of financial advice as people realise the challenge of keeping up with the speed of change and the risks of ‘going it alone’.
Technology bringing change
There’s one area where change is a little more predictable, albeit no slower. That is, technology will simplify and make more secure how you manage clients’ investments. With enhancements to the adviser portals for IOOF Pursuit and IOOF Employer Super, it’s been a focus for IOOF in 2016 and will be again in 2017.
While the technology we provide will offer opportunities, internet security will present a challenge for advisers. In this edition of Adviser News, Rob Urwin, Head of Investigations, Governance Services at IOOF talks about internet security and AUSTRAC’s recently released report into Australia’s financial planning sector. With practical steps to protect yourself and your clients, I urge you to take a look.
How we protect our adviser and client information is very important and to that end, I welcome Sharam Hekmat as our new Chief Information Officer and member of the Leadership Group.
We look forward to supporting your business in 2017 and I would like to wish you all the best of success and happiness this year.