Are you still waiting at the dock?
A new year always brings a sense of opportunity. 2023 has kicked off with a can-do attitude amongst wealth executives, unlike any years I’ve seen before in the industry.
Like Jess Watson’s 2009 circumnavigation feat at the tender age of 16 (a reminder of which just dropped on Netflix), without exploration, investment in disruptive collaboration and innovation, the industry lagards and naysayers will be on the wrong side of this pivotal moment in wealth and advice post the Quality of Advice Review (QAR).
It's hard not to feel inspired by Jessica Watson’s voyage around the globe – 7 times her boat, Pink Lady, was knocked down with her mast horizontal to the water, with at least once, fully submerged 15 feet under. The re- entry into Sydney Harbour after 210 days solo at sea could be a metaphor for the emergence of the advice profession in 2023.
A profession that in part, remains in control of the success of so many in the wealth eco-system. With the hotly anticipated QAR recommendations landing last week and a new body likely being formed, the Financial Advice Association (FAA) with the merger of the AFA and FPA, there’s already momentum behind change with significant investment in new product launches, technology and data. 2023 is the year advisers can explore, take on some business risk and navigate the next few years with those willing to adapt to their requirements.
A recurring theme that has only accelerated in the latest six months and as our future flows are portending, managed account volume will only grow from its strong showing in 2022. With the ongoing outflows of active managers continuing into 2023, how are these asset managers positioning themselves with investment consultants? How does their investment thesis resonate with the adviser opening up their APL through an MDA offering?
The tidal wave of superannuation funds encroaching into advice is likely to influence the makeup of the investment landscape and approved product lists for the foreseeable future. Many super funds are bolstering their internal and 3rd party networks, armed with the retirement income covenant in mind and readying themselves for the QAR. Some are now expressing a willingness to work with platforms rather than compete, as platforms further entrench themselves with advisers and consumers alike.
And what of the technology enablers? Having reviewed feedback from nigh on 1,400 advisers in the 2023 landscape survey (released end of March), advisers are in search of simplicity. With certain advice software trying to bring the full solution to market, many technologies have overreached, where feature heavy tech platforms are being downgraded, perceived as too complex. One of the biggest launches we await is in the platform space – CFS Edge. Will this bring an arms race among platform providers? And how will asset managers, MDAs and even super funds respond to being on the supermarket shelves of where advisers and asset consultants now constantly live?
2023 is a year to think about your own circumnavigation, even if a few knockdowns happen. Advisers are looking!
