The last 12 months have been a rollercoaster for our industry, especially with the increased uncertainty with the Banking Royal Commission.
However, there are also some great indicators of growth and investment in our industry over the next few years. The trends for the Australian financial planning and advice industry shows that there are some unexpected yet welcome surprises in store.
Falling consumer confidence in our industry provides new opportunities
Due to a few unethical and rogue operators, our industry has taken a lot of damage in the public’s eye over the last year. The Banking Royal Commission has uncovered some significant and harrowing stories, including some licensees charging clients without offering a service or even forging client signatures. The media has been reporting widely on the Royal Commission, and all of this has seen a dramatic loss of consumer confidence in our industry.
But out of these scandals there are opportunities for growth. As new legislation and regulatory frameworks are implemented, financial planners now have an opportunity to adopt greater pricing transparency. Financial planners who can prove they have an ethical operational and remuneration framework will be able to attract new clients and increase consumer confidence.
Increasing real household disposable income
According to IBISWorld, real household disposable income is expected to increase over the next two years, which means households will have a greater ability to spend and invest. This will increase the demand for the services that our industry provides. While there is still uncertainty about whether households will save, spend or invest, financial planners who can promote the long-term benefits of investing will be able to attract new clients.
An aging population means a growing need for financial planning
With an aging population, more and more Australians will require financial planning services as they look towards retirement. By 2027, nearly one in five Australians are expected to be over the age of 65. With a greater asset base, this population are more like to turn to financial planners as they come closer to retirement. However, these are also the people who have been most affected by the scandals uncovered in the Royal Commission. Successful financial planners will be able to market their services to this aging population whilst also rebuilding trust and confidence.
Rapidly changing technology
Just like most industries, our industry is being dramatically changed by new technologies. From artificial intelligence to algo-banking, financial planners have to keep up with and adopt these new technologies. One of the most important technological changes in an increased reliance on fintech that uses in-depth data analytics. Clients are increasingly expecting their advisers to be on top of these technologies, and use them where appropriate.
Do you want to achieve new heights for your financial planning business? Do you want to streamline your client management whilst meeting your compliance requirements with ease? Contact AdviserLogic today, or browse our range of financial technology software.