Matt Lawler and Darren Whereat

The Shift in Institutional Ownership

The financial advice sector is undergoing significant changes, with major institutions like AMP planning to divest from their licensee businesses, following a trend initiated by banks in the wake of the Royal Commission. This movement marks a notable shift in how financial advice will be delivered, as advisors seek greater independence from product manufacturers. AMP's decision, influenced by a three-year plan, involves deep consultation with advisors to ensure a smoother transition that prioritizes fiduciary responsibility and builds trust with clients. The goal of this structural change is to foster a more standalone, client-focused advice model, separate from institutional affiliations.

Insights from AMP and Rhombus Advisory

Both AMP and Insignia have highlighted the importance of embedding independent thinking within their frameworks, which led to Insignia’s establishment of Rhombus Advisory. This move was designed to attract self-employed, entrepreneurial advisors seeking a partner that aligns with their values and provides necessary support while maintaining operational independence. The executives discussed that advisors are increasingly looking for environments where they can thrive without perceived conflicts of interest created by institutional ownership. As such, these companies are prioritizing professional standards, technology investments, and advisor feedback as they navigate this transition.

Advisor and Client Relationships in Transition

The restructuring efforts at AMP and Rhombus Advisory emphasize maintaining strong relationships between advisors and their clients during times of change. Advisors have noted that clients primarily recognize them as the face of their practices, with brand recognition of the larger institutions playing a diminishing role in client loyalty. Ensuring a seamless transition is critical for both AMP and Rhombus, as their respective leaderships are committed to supporting advisors in delivering uninterrupted quality service to their clients. The focus remains on the continuity of professional service, ensuring that the transaction does not disrupt the evolving dynamics between advisors and their clientele.

The Future of Financial Advice

Looking forward, both Darren and Matt foresee an evolution in the advice profession toward better client outcomes through professional independence and collaboration. There is a vision of the profession embracing a dual structure where independent advice coexists with product-based guidance, catering to diverse client needs. The leaders assert that as the industry adapts to demographic changes, the role of advisors will become increasingly crucial, especially as more individuals seek guidance in retirement planning and financial management. Ultimately, a commitment to professionalism and best interests is viewed as essential for the industry’s growth and transformation.

Shape of advice

Matt Lawler and Darren Whereat

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Quick takeaways

Deep dives

The Shift in Institutional Ownership

Insights from AMP and Rhombus Advisory

Advisor and Client Relationships in Transition

The Future of Financial Advice

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