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  2013 has been a positive year so far and investors are confident: report.

  Return in investor confidence in early 2013 helped lift planners’ businesses

• Planners still see many challenges arising from FoFA, and most weren’t ready yet
• Dealer groups advocacy increased again and is now the highest it has been in four years
• Planners’ businesses boosted by the return in investor confidence

Planners are more positive in 2013 following a boost to their inflows with investor confidence returning in early 2013, according to a new report from leading wealth researcher Investment Trends.

In its tenth year, the May 2013 Planner Business Model Report is an in-depth study of Australian financial planners and their technology needs. The study is based on a survey of 1,141 financial planners concluded in May 2013.

“New client inflows, which were depressed between 2009 and 2012, increased by 22% in the 12 months to May 2013 thanks to the return in investor confidence,” said Investment Trends Senior Analyst Recep Peker. “This has helped boost planners’ confidence, their outlook and their business profitability.”

The average number of active clients serviced annually by planners also steadied this year after falling 20% between 2009 and 2012.

After hitting a record high in September last year, we finally saw the flows going into cash and term deposits come down in favour of growth assets (managed funds and listed investments), which has also been a positive outcome for product and platform providers.

Fee disclosure statements a dark cloud over sunny times

Despite this return in confidence, most planners (95%) still see challenges posed by the Future of Financial Advice (FoFA) reforms. The top five challenges relate to administering client opt-ins, administering fee disclosure requirements, and the compliance burden arising from FoFA.

“In previous years’ studies planners were more concerned about opt-in and not being able to provide affordable advice to lower balance clients,” said Peker. “They have now finally awoken to the administrative burden posed by the annual fee disclosure requirements, with the proportion citing this as a challenge jumping from 12% last year to 48%.”

“And the reason this is a big challenge is because not all practices are completely ready for FoFA,” said Peker. “In fact, despite running this study just two months before the reforms came into effect, only 23% reported that they were ready to administer fee disclosure statements.”

The study has found that, in general, NAB Financial Planning planners felt the most FoFA ready.

“There is still a great opportunity to help planners, with 70% saying they would like their dealer group to help them with implementing FoFA changes,” said Peker. “Fee disclosure statement and other templates are at the top of their list, but they’re also calling for more education and further enhancements to their systems.”

Good support from dealer groups is the secret for happy planners

Dealer group advocacy has increased again and is now the highest it has been in four years.

“Planners are generally happier with their dealer groups, but these results vary markedly between different dealer groups,” said Peker. “There are clear drivers of success here, and what we find is that it comes down to planners’ views on the level of support, flexibility and proactivity provided.”

Securitor had the highest level of advocacy from its planners, with those who are most happy with it often citing the excellent support and compliance services, being pro-active in tackling FoFA related issues and keeping them informed.

How can dealer groups improve support? At an industry level the key areas where planners want more help from their dealer groups relate to improving software and processes, and then business development, which is followed by help in acquiring new clients.

About the report

The results are drawn from the Investment Trends May 2013 Planner Business Model Report, released to Investment Trends’ clients last week. This report was based on a survey of 1,141 financial planners in April and May 2013.

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