AZ NGA’s Barrett sees future in ‘Super’ advice firms
Small to medium financial advice firms have their place but the future in terms of meeting unmet advice needs will rely on a new category of Super firm that is akin to a mid-tier accounting or professional services firm, according to AZ NGA chief executive, Paul Barrett.
What is more, he says that around 15 firms within the AZ NGA network have committed to pursuing and executing a Super firm strategy over the next three to five years.
He claims that the only way the advice industry can achieve its mission and purpose to financially prepare Australians for the future is by “raising an army of large, corporatized Super firms”.
Barrett’s views are contained in a white paper – Ready or Not? A guide to building a Super firm – which claims the industry’s current structure and composition is holding it back from reaching the 12.4 million Australians who need professional advice.
“If the advice industry’s purpose is to help people get their financial affairs in order and, ultimately, achieve their goals then players need to supercharge their capability and capacity to see more clients and that means getting significantly bigger,” he said.
“While small, specialised business can do well too, we believe that size and scale create opportunities for businesses to offer a broader, deeper range of services and enhance their employee value proposition to include career opportunities.”
The paper claims the blueprint for a Super firm is based on five essential components.
They are a compelling employee value proposition, client value proposition and shareholder value proposition, a defined enterprise architecture and healthy corporate culture.
“To create a Super firm, advisers and business owners must fuse together the things that SMEs do really well with the things that only big businesses can do,” Barrett said.
“As advice businesses grow and increase in size, smaller firms will struggle to deliver a compelling proposition for employees, clients and shareholders relative to larger, better-resourced counterparts.”
On the question of AZ NGA firms becoming Super firms he said the majority would pursue a strategy encompassing organic growth and mergers and acquisitions, noting the acquisition of Australian Unity’s Financial Advice business.
“We have so much conviction that advice businesses need to scale up and get bigger that building and investing in Super firms has become a key plank in our refreshed strategy,” he said.
So after overseeing a Bank or two’s Advice businesses that saw billions stolen in FFNS, thus leading to the RC and further Red Tape mad regulation imposed on Real Advisers that run small to medium Advice businesses.
Now the same types want to run the next generation of “Super” Advice firms. FFS no.
The last thing Real Advisers need are these types telling us all what to do.
If such past insto conflicted vertical models and FFNS hadn’t caused so much mass over regulation, then we wouldn’t be drowning in Red Tape and small to medium advice firms could service more clients.
There will always be a place for the boutiques, but I Disagree with your narrative, most vertically intergrated issues, conflicted REM etc., are gone. The mass REGULATIONS are already here!
Barretts right, scale will matter (does matter) Particularly as Finacial Planners seem to be the whipping boys of ASIC, AFCA and the like! Along with Industry funds. And the industry bodies don’t have enough clout to take them on.
Scale is very important for vertically integrated conglomerates, whose primary objective is selling inhouse product via influence over their aligned advisers. But scale is not necessary for professional, independent, advice.
“raising an army of large, corporatized Super firms”.
Sounds very Napoleonic doesn’t it.
Napoleon oversaw the death of approx 3,000,000 people in his wars.
Grandiose plans of expansion and conquer, for who’s benefit ?
Look forward, not backward. The future does involve “super” firms. Single person practices don’t have the scale to keep costs down, nor meet the best interest obligation to look after clients if the only adviser takes leave or gets sick. If you don’t want to become one, join one.
The arrogance and self interest here is pungent. Scale is important but super institutions fully vertically integrated is a fast train to more regulation and another royal commission. In the absence of a strong industry body, should we expect these types of “opinions” to get outsized coverage?
does anyone have access to said whitepaper please?
https://www.aznga.com/news-insight/new-paper-reveals-the-blueprint-for-building-a-super-firm/