Financial advice in transformation: a reflection on 2019…


Graham Dixon, Head of Product & Client Solutions at Morningstar AU/NZ  |   22nd Apr 2020  |   5 min read

In the current climate, many advisers are struggling with the paradox of where they see the industry is headed vs the turmoil they are experiencing. There is widespread optimism around the move to independence and the professionalisation of financial advice, yet the immediate uncertainty and unravelling of the landscape following the Banking Royal Commission, is causing many advisers to rethink their business models and even their careers.

 

Until this year, advisers have benefited from being part of large institutional networks, with services being subsidised or delivered to them at a price point that reflects the scale of their licensee’s operations. However, with the shifts in the licensee landscape, many advisers have come to realise the true cost of running a business in 2019 – and it’s not always pretty.

 

Then, there are the decisions advisers are faced with. Self-licensing or not? Which licensee offers the right levels of service, protection, value, opportunity. Do advisers stick with familiar technology solutions or try something new? If the latter, how many solutions should be tested? Will they work together seamlessly and how can that be validated before committing? Or do you restrict your search to well-capitalised firms that share your values, and trust them to deliver. And then there’s the day job – looking after clients. It’s all-consuming.

 

2020 will be the year all this comes to a head, and the industry begins to resemble its future self. Those with a clear business plan will feel more comfortable heading into 2021, with the removal of grandfathered commissions looming. A clear technology strategy will be key too – record-keeping is no longer negotiable, scaling your business is impossible without integrated digital solutions, and the ability to deliver compliant advice (and sleep easy at night) is enabled only by a solid technology foundation.

 

At Morningstar, we’ve been working hard on our solutions to support advisers in this environment. We’re driven by our mission – empowering investor success – in everything we do. And the work we do with advisers is paramount to that mission. We’re committed to supporting advisers in running efficient and compliant practices, delivering superior investment outcomes and engaging effectively with clients.

When I look back on 2019, it’s been quite a year, delivering on that mission and vision;

 

If 2019 felt like a marathon, get ready for 2020!

Originally posted 2020-02-13 15:02:20.

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