The super funds’ collective willingness to pay inflated prices for bank shares is starting to make them look like outliers. With about 30 per cent collective ownership of the banks, APRA sees “stability risk” as a salient concern for all stakeholders that can’t be ignored.
The inertia that rules the retirement system means bigger ideas are needed if members are going to get the best outcome in retirement. And with millions set to retire in the next few years, time is of the essence.
The advice and investment stories that mattered most to advisers in 2024
This year the advice industry withstood stalled regulatory reform, an inflated compensation levy, a dearth of personnel and an increasingly fragmented licensing landscape to continue building robust, profitable businesses.
Advice groups across the spectrum continued to migrate in 2024. From AMP dissolving its licensing arms to Viola Private Wealth’s bold new venture and the all-encompassing march of AZ NGA, the advice ecosystem has maintained its penchant for constant evolution.
Meanwhile, resilient markets continued to buoy the fortunes of passive product providers and pad the portfolios of investors. Active equity teams struggled to match benchmarks, again, and continue to wait pensively for markets to throw up the kind of challenging conditions that bring their strengths to light.
In the investment management landscape, private capital took centre stage, with private credit ascending to overtake private equity as the alternative investment de jour. Look out for secondaries providers to do the same in 2025 as market ructions and the need for liquidity spurs further fund-level selling of debt and equity assets.
The stories that generated the most engagement this year reflected the changing shape of the industry, with asset consultants – the “new captains of capital” – finding themselves in the spotlight for the first time. Advisers are keenly aware that the researchers running model portfolios and the responsible entities behind these models are pulling the strings on their clients’ collective capital, and it’s clear they want clarity and governance to go with performance.
Here are the stories that most mattered to advisers in 2024, as judged by our readers at The Inside Adviser.
1. Grumbles over Evidentia deal highlight growing pains in the rise of asset consultant cohort
An evolutionary leap in the retail investment product landscape is taking place, with asset consultants displacing financial advisers across rich corners of the value chain. Scarcity Partners’ big bet on Evidentia, and how it’s being received, brings into focus just how seismic the shift really is.
2. ‘Completely unfair’: Advisers to be slugged another $4,165 over Dixons CSLR bill
Costs for the compensation scheme are spiralling out of control, with the FAAA estimating another $4,165 will be added to every adviser’s CSLR bill – bringing the estimated total to $5,709 – if the funding model isn’t re-examined.
3. Ironbark’s Royal London fiasco puts advisers in uncomfortable portfolio position
For those who have recommended the Royal London’s Core Fund, especially, the incongruous management switch means they have to explain to clients why it will probably take on a completely different investment style.
4. BDM bonuses vanish as fund flows dry up… but not in every sector
Not all fundies are bringing home a smaller bonus this year, according to Kaizen, with BDMs in the alternatives space doing better than those in the more traditional equities and fixed income asset classes. The big trend, however, is that the most in-demand BDMs are now the ones that can sell to investment consultants as well as advisers.
5. Adviser Charlie Viola leads Pitcher Partners buyout to set up new HNW wealth firm
After 21 years building up Pitcher Partners’ wealth management division into a $3.6 billion powerhouse, the high-profile adviser will break from the firm to create an advice group focused on servicing HNW clients and their families.
6. AMP doing its best to preserve the worst of its reputation
By reneging on long-standing employment deals, AMP has again given the impression that it has welched on an existing agreement once it realised the deal wouldn’t work out in its favour. Do that repeatedly and people stop wanting to do business with you.
7. ‘I’ve been busy’ and other things advisers should stop saying to clients
A long-running study has revealed a raft of information about the way financial services professionals communicate with their clients, as well as four key ways they can improve the discourse.
8. ‘I’m sick of being an adviser ATM machine’: FAAA chair lashes out over CSLR
Even though most of the Dixons Advisory complaints are yet to be submitted, the CSLR has already allocated a $24 million bill to the industry. Good financial advisers will be forced to pay for the nefarious and neglectful acts of bad ones for years to come.
9. David Leon: Leading the boutique, independent advice brigade
After witnessing the evolution of the US advice market, David Leon knew his Australian clients would want product and advice to be separate. It’s why the Adelaide adviser was so surprised the Hayne Royal Commission took so long to come about.
10. Have we reached peak model portfolio?
There is an incredible rush to bring model portfolio offerings to market from every corner of the advice ecosystem. From platform providers to licensees and advice groups, researchers and asset consultants, the list of service providers casting themselves as mini fund managers is growing exponentially. We’ve seen this kind of thing happen before.
