The alternatives sector is unique in that it’s largely defined by what it’s not. Accordingly, how you fit alternatives within your existing asset class structure will depend on relativity, and how the investments interact with the other asset classes according to Atchison’s Kev Toohey.
The private markets juggernaut is one that has also thrown up a wealth of data that other players can use to sharpen up due diligence when making their own investment decisions – especially in the growing secondaries market.
Opportunity for those who remain as adviser exodus continues
The Musical Chairs report released by Adviser Ratings offers insightful data on the wealth management industry after undergoing significant changes over the last five years. As advisers return to the office, with the occasional small COVID-19 outbreak, movement between firms continues.
The first quarter saw 2.2 per cent of advisers move to a new licensee, which saw AMP losing its crown as the largest planning group in the country. AMP Financial Planning and Hillross collectively lost 65 advisers.
In total there were “369 adviser departures in Q1, or a loss of 1.78 per cent of the total adviser pool”. The majority coming from banks (10.4 per cent). The number of planners leaving the industry is likely to continue as the industry exam deadline looms for existing advisers. The percentage of exits will likely increase. According to the report, for every adviser who joined in the last quarter, there were 10 who left. New adviser numbers dwarfed by exits.
While many have returned to the office, the pandemic has altered the standard work routine and replaced it with a bespoke routine, guided by the client, business and personal demands. The Australian Bureau of Statistics found “41 per cent of people were working from home at least once a week, compared to 24 per cent before the pandemic.” As a result, the exodus of advisers has accelerated.
For those who are staying, there’s a real opportunity here as competition heads out the door to:
- Gain a real edge over competition via an innovative platform provider
- Target underserviced suburbs where departing adviser numbers are the greatest
Platforms have always faced off in a battle for tech supremacy to win over the client. However, according to the Adviser Musical Chairs report, “the pandemic-led focus on cost compression and service, coupled with the emergence of new players like Mason Stevens and WealthO2, is keeping vendors on their toes like never before.”
The platform space, once the hallmark of disruption, faces itself being disrupted by newer, nimble players. The report says “Netwealth, HUB24 and emergent Wealth02 received the highest net promoter scores in Adviser Ratings’ 2020 landscape report.” Overall Netwealth is still the top ranking platform when it comes to ease of use, price and experience. “HUB24 has partnered with Aberdeen Standard Investments on what it calls a ‘bionic advice’ model, where advisers and clients are supported by AI to move towards certain wealth goals,” as quoted in the report.
Investment robos such as Sixpark and MapMyPlan are generating opportunities for advisers to partner with, to handle simple client needs in a low cost way, so that advisers can focus on what matters most.
Adviser Ratings published an article titled, “Considering A Tree or Sea Change? Here’s Where Advisers Are Leaving a Gap In The Market”. The article discloses suburbs that have the highest adviser departures and growing populations. Such insights could be useful for prospective sea or tree-changers and new advisers looking to get a foothold in the market” with the trend most definitely regional.
