Greetings as we begin to prepare for XMAS.
Well no shortage of activity in the industry this month with the announcement of the restructure of the FPA to represent individual practioners only.This certainly changes the dynamics within the various associations and to my mind is a courageous decision which clears up and real or perceived conflicts with the FSC. Due to the nature of our business we are members of no fewer than 6 financial services associations spanning the full breath and width of client requirements. Part of my mission is to improve the dialogue between them in understanding that no one fee model is appropriate for the entire market and prescriptive rules have some very nasty side effects.
To my mind it should be easy enough for all market participants to engage in the same clearly stated principle based guidelines to ensure a largely disengaged public have access to affordable financial planning advice whether on a ongoing or one off bases. Students of business history would be well aware of the long term effects on an industry where it has been distorted and manipulated by external forces to achieve political objectives. Sadly an industry that had traditionally operated with competitive tension through a largely horizontally integrated structure where fund managers competed to get onto administration platform who then competed with advisors for business has effectively ceased to function.
In its place is a new vertically integrated structure where banks and industry funds control all levels of the distribution chain and can freely transfer price internally without showing any external volume based payments. The natural effect being the squeezing out of smaller investment managers and dealer groups who are being regulated out of existence. Individual advisors are now concentrating on the Self Managed Super Fund market increasingly using ETF’s ,Direct Shares and Term Deposits to replace traditional managed funds. In effect servicing a much smaller client base with significantly increased fees the exact opposite of stated Government objectives. The free market certainly has its faults but it still remains the best system we have.
Finally some sad news with the sudden passing of my friend and fellow career financial advisor Vaughan Mackeller.Vaughan was well known to many of you and to celebrate his life we are holding a memorial service at St Matts Manly at 2.30 on Wednesday the 22nd December followed by a Wake.It promises to be a packed house which you all invited to give him a good send off.Vaughan would have liked that.Drop me a line if you are coming.
Till next time
Tony
