Offshore disruptors eye Aussie advice sector

Australia's financial advice industry is attracting the attention of international groups that are looking to take advantage of gaps in the market, made evident by the lack of innovation within the industry, says Forte Asset Management.

Offshore disruptors eye Aussie advice sector

Scott Hodder

Last Updated: 12 October 2015 Published: 12 October 2015

According to Forte Asset Solutions managing director Steve Prendeville, Australia's financial advice sector was desirable to foreign investors was because the industry was "spared" the effects and disruption of the GFC.

"Our market is seen as ripe for disruptors given the domination of the banks, the tension between banks/advisers and consumers and the heavy margins being protected by lack of innovation and investment," Mr Prendeville said.

"A recent US visitor commented that there are 850 less Dealer Groups and 30,000 less advisers in the US and the market has disintermediated where once some products were the sole domain of the ultra-high net worth investors is now being made available to all."

"The market tore away duplication and the middle men and our market is now exposed to experienced disruptors. These disruptors come [with] technology and new business models," he said.

Mr Prendeville added the low value of the Australian Dollar has assisted new entrants overcome the "high barriers" caused by regulation and, in particular, licensing.

The advice sector has recently seen the entrance of a number of international groups including Italian asset manager Azimut via its Next Generation Advisory business which has acquired a raft of practices including CBA-aligned Eureka Whittaker Macnaught.

The industry has also seen the entrance of multinational deVere Group which has come with the promise of creating "Australia's largest independent advice group".

According to Mr Prendeville, he has never seen such an abundance of groups looking for investment opportunities in Australia as there are now.

Mr Prendeville also said he has had conversations with groups in the US, South Africa and Asia looking to enter Australia's financial advice sector.