The Rise of Multi-Partner Super Firms: The Future of Financial Advice

The financial advice landscape is evolving rapidly, with multi-partner "super firms" emerging as the dominant business model of the future, according to Encore Advisory Group director Tom Reddacliff. This shift represents a significant departure from the traditionally prevalent single-owner practices that have characterized the industry.

Current Market Dynamics

Reddacliff identifies two distinct types of advice businesses operating in today's market. The first category comprises businesses experiencing robust growth with abundant client opportunities. "Managing growth" challenges in these firms are what Reddacliff describes as "the good problems to have."

However, these growing practices face their own set of challenges. Reddacliff identifies three critical areas requiring attention:

Human resources capabilities
Consistency of processes
Strength of balance sheets

The Emergence of Super Firms

"The ultimate business model [what we are dealing with now] is the emergence of privately owned, big solid multi-partnered scalable firms and that is the business model of the future," Reddacliff asserts.

These super firms typically feature:

Solid balance sheets
Multiple partners
Scalable operations
Interest in acquiring other businesses

The Challenge for Single Practices

While single-adviser practices continue to exist, they face increasing operational challenges. These smaller businesses often struggle with rising costs and need to focus intensively on operational efficiency and cost management. According to Reddacliff, these practices need to operate "really sufficiently" and focus on "managing your costs really well."

Looking Ahead

The trend toward larger, multi-partner firms reflects the maturing of the financial planning industry. As the sector continues to evolve, the super firm model appears poised to become increasingly dominant.

*This article draws insights from "Rise of the multi-partner 'super firm'" which appeared in Professional Planner, February 2024.
Read the full article: Rise of the multi-partner ‘super firm’

Clear Labels, Better Outcomes: Learning from the UK Advice Model

The Australian financial advice industry could benefit from adopting a UK-style regulatory approach that clearly differentiates between different types of advice providers, according to Encore Advisory executive chair Tom Reddacliff.

The UK Model: A Blueprint for Success

"The UK model clearly delineates between restricted advisers and independent advisers," Reddacliff explains. "It's the concept of making it clear to the client what model they're engaging with and where it is the restricted model or the independent model."

This clear labeling system helps consumers understand exactly what service they're receiving and from whom. The approach could address current disparities in the Australian market, where consumers can have vastly different experiences receiving advice from relevant providers versus limited scope advice through superannuation funds.

Creating Fair and Proportionate Regulation

Reddacliff advocates for an appropriate regulatory environment that provides distinct guidelines for each model. "The [holistic advice] model should be under a best interest duty, but it's also making sure that what the restricted model has is fair and proportionate and not massively different," he notes.

The potential benefits of this approach extend beyond mere clarity. Without implementing a restricted advice service similar to the UK's, Reddacliff warns that Australia risks limiting the supply of advice. "That's not a good client outcome either. Too often in the industry we don't start with the client, and this is an opportunity to start with the client and work out how they want to engage with these services."

Streamlining Documentation Requirements

Drawing parallels with other professions, Reddacliff points to the accounting industry's more straightforward regulatory regime, despite handling significant business liabilities. "When they're documenting their advice to the client, rather than listing every single thing they considered in their head in a massive document, all they end up doing is summarising the conclusion," he notes, suggesting a similar approach could benefit financial advice.

A Collaborative Approach

The joint submission represents a unified perspective from three consulting firms with complementary expertise. This collaboration brings together operational compliance, technology, and business coaching viewpoints to present a comprehensive case for reform.

The proposed changes align with broader industry goals of increasing advice accessibility while maintaining high professional standards. By adopting clearer labels and more proportionate regulation, the Australian advice industry could better serve consumers while supporting sustainable business models.

*This article draws insights from "Follow the UK and give advice clearer labels" which appeared in Professional Planner, September 2022.
Read the full article: Follow the UK and give advice clearer labels

Active Advice: The Future of Financial Planning

The financial advice landscape is undergoing a significant transformation, with active advice emerging as the dominant model for successful practices. According to Encore Advisory managing director Tom Reddacliff, advisers who deeply engage with their clients' financial lives are best positioned for future success.

"Active is the only viable business model," Reddacliff asserts, pointing to recent regulatory changes that have reshaped the industry landscape. The abolition of grandfathered commissions and the transition from biennial to annual opt-ins are driving this shift toward more engaged advisory relationships.

These regulatory changes are more than just compliance requirements – they're reshaping the fundamental nature of adviser-client relationships. "If you don't have an active, valuable relationship then that form of revenue is dead in the water," Reddacliff explains, highlighting the critical importance of maintaining meaningful client engagement.

The impact of this shift is already evident in practice valuations. Reddacliff notes a significant disparity in how the market values different types of advice businesses. "A revenue book where a buyer is concerned about future 12-month opt-in is being discounted to a two or below revenue multiple," he says. In contrast, practices with proven, engaged client relationships are commanding valuations "somewhere in the high twos."

This valuation gap underscores the market's clear preference for active advice models. Businesses that can demonstrate strong client engagement and consistent value delivery are being rewarded with higher valuations, while those relying on legacy revenue streams face increasing pressure.

Looking ahead, Reddacliff predicts that the adviser population will contract to approximately 15,000 by 2023. However, this reduction, combined with growing demand for financial advice, could create favorable conditions for remaining practices. "There's every reason to be optimistic that there's some greener pastures ahead," he notes.

For advisers navigating this shifting landscape, the message is clear: building and maintaining active, engaged client relationships isn't just good practice – it's essential for business survival and growth. The future belongs to advisers who can demonstrate ongoing value to their clients through regular, meaningful engagement.

*This article draws insights from "Active advice 'the only model in town'" which appeared in Professional Planner, February 2021.
Read the full article here .

Navigating the Changing Licensee Landscape: Expert Insights

As the financial advice industry undergoes significant transformation, selecting the right licensee or business partner has become more critical than ever. With major players entering and exiting the wealth management space, advice practices face crucial decisions about their business partnerships and future direction.

Industry Megatrends and Market Dynamics

In this timely webinar, Tom Reddacliff, Executive Chairman and Director at Encore Advisory Group, delves into the industry megatrends reshaping the advice landscape. With the licensee market in transition, understanding these trends is vital for making informed decisions about business partnerships and future growth strategies.

Key Focus Areas - Industry Megatrends

Tom examines six key megatrends currently shaping the industry, providing insights into how these changes affect advice businesses and their choice of licensee or service provider.

Essential Partnership Conversations

Learn about the four crucial conversations every advice practice should have with potential suppliers or licensee partners. These discussions are fundamental to establishing strong, sustainable business relationships that align with your practice's goals.

Strategic Partner Selection

Discover the key criteria for selecting long-term licensee partners and solutions providers. Tom shares practical strategies to help practices efficiently create a shortlist of suitable suppliers, saving valuable time in the selection process.

Market Impact Analysis

Gain valuable insights into how current market turbulence affects the licensee landscape and what this means for advice practices. Understanding these dynamics is crucial for making informed decisions about business partnerships.

The webinar also examines the current financial market environment and its implications for advice businesses, providing a comprehensive view of the challenges and opportunities facing the industry.

Expert Guidance

Drawing on his extensive experience in the financial advice sector, Tom Reddacliff offers practical insights and actionable strategies to help practices navigate this period of industry transformation. His expertise provides valuable guidance for practices seeking to make informed decisions about their business partnerships and future direction.

*For more detailed insights from Tom Reddacliff on selecting licensees, asset consultants, and tech providers, visit the Netwealth Insights hub:
Best practices in selecting a licensee, asset consultant or tech provider .

Update: Winning the Long Game for Practices and Licensees

Post-Hayne Royal Commission, financial services firms must look to the long game to ‘future-proof’ their businesses and continue delivering trusted advice. This involves aligning with the three foundations of trust: capability, character, and communication.

Foundations of Trust

Capability: Trusting the adviser's capability, process, and approach, supported by a professional accreditation system.

Character: Trusting that the adviser understands client needs and operates within a fiduciary framework.

Communication: Consistency and clear communication to reinforce client faith in the advice experience.

The industry has struggled to achieve these pillars of trust, but they represent the long-term future of the financial advice sector.

Core Tenets for Long-Term Sustainability

1. Client-Driven, Active Revenue

Practices must derive 100% of revenue from professional services, removing conflicted remuneration. Active, valuable client relationships will command a premium under the RC Report’s guidelines. Revenue streams such as grandfathered commissions and broking commissions will face discounts or elimination.

2. Data Cohesion and Efficiency

Integrated advice platforms with unified data sources can reduce costs and enhance client experiences. Practices must eliminate inefficiencies like multiple data entry and rework to adapt to the growing complexity of compliance and operational demands.

3. Professional Ownership Structures

Succession planning, cultural alignment, and partnerships with long-term capital partners are critical. Sole operator models are becoming unsustainable, and the AFSL system could eventually phase out as financial planning evolves into a profession.

4. Strategy, Governance, and Accountability

Governance processes, including independent chairs and documented strategic plans, are key to driving proper strategy formation and execution. Practices with effective governance can see significant profitability improvements.

5. Licensees as Value-Added Advice Groups

Licensees must provide professional support services and build peer networks that enhance practice efficiency, profitability, and client outcomes. Removing product-subsidized remuneration models will drive this evolution.

Looking Forward

The post-RC landscape offers both opportunities and challenges. Practices must focus on what consumers value, eliminate past biases, and develop efficient, effective business models. Integration across financial planning, accounting, and mortgage broking could finally lead to a unified financial services profession.

Long-term success requires clear strategy, disciplined action, and a mindset oriented towards opportunity rather than disruption.

*This article draws insights from the original paper written in August 2018, updated to reflect impacts from the Hayne Royal Commission Final Report. For further insights, visit Encore Advisory Group.

Part II: A Professional Sector Needs a Professional Structure

The financial planning sector can only take its place as a true profession if it adopts a structure free of product aggregation and conflicted purposes. This paper explores the critical steps needed for financial planning to align with other recognized professions.

The Need for Professional Structure

Unlike established professions like law, medicine, and accounting, financial planning operates under a licensee structure accountable to the regulator. This structure has enabled product aggregation, creating conflicts of interest that hinder professionalism. For financial planning to mature, the focus must shift to a professional mission grounded in fiduciary responsibility.

Challenges Stemming from FSR

The Financial Services Reform Act (FSR) of 2001 sought to simplify legislation but inadvertently focused on product rather than advice. It enabled licensees to participate in product aggregation through margins, creating systemic conflicts and placing financial product sales over client-centric advice.

Separation of Product and Advice

Financial planning must move toward a model where advice and product are economically and operationally independent. The current system, including managed accounts, sustains volume-linked revenues through complex structures. This undermines public trust and fails the "front-page test" of transparency. The Royal Commission reinforced the need for structural separation.

The Case for Individual Certification

Individual certification, as seen in accounting and law, would replace the licensee model with a public practicing certificate structure. This would allow financial planners to operate under Professional Standards Legislation, ensuring fiduciary alignment and reduced conflicts of interest.

Perceived Barriers to Certification

Professional Indemnity Insurance: Transitioning to individual certification will require collaboration among professional bodies, insurers, and brokers to address liability issues.

Approved Product Lists: Retaining investment committees and quality product vetting can assist in the transition to certification.

ASIC Oversight: Direct data submission from advice businesses to ASIC could streamline compliance while reducing reliance on licensees as intermediaries.

Role of Licensees as Value-Adding Advice Groups

In the long term, the licensee model should evolve into advice groups offering genuine value to advisers, such as business efficiency tools, client review systems, and professional networks. Licensees should no longer rely on product aggregation to subsidize fees, fostering true competition based on value.

Technology and the Future of Regulation

The rise of RegTech and advanced analytics positions ASIC to manage compliance efficiently, requiring businesses to provide data directly. Licensees will need to add value beyond acting as intermediaries, helping advisers navigate complexities and adopt technologies like APIs for seamless regulatory reporting.

Conclusion

Financial planning’s transition to a profession requires structural reform, individual certification, and a focus on client-centric advice. The industry must embrace change, eliminate conflicts, and leverage technology to enhance efficiency and transparency. True professionalism is within reach if stakeholders commit to this vision.

AI in Financial Advice: Bridging the Accessibility Gap

Artificial Intelligence is revolutionizing the financial advice sector, offering promising solutions to make quality advice more accessible to everyday Australians. As the industry grapples with increasing demand and accessibility challenges, AI-powered tools are emerging as vital allies for financial advisers.

Tom Reddacliff, CEO of Encore Advisory Group, emphasizes that while AI applications in financial advice are in their early stages, they represent a significant opportunity for the industry. "These solutions will typically work with advice-specific tech tools and prioritize tech stack connectivity," Reddacliff explains, highlighting the importance of integration with existing advisory processes.

For practices considering AI implementation, Reddacliff outlines a strategic approach. The first crucial step is engaging the team in documenting current processes thoroughly. Following this foundation, AI can be leveraged to streamline these processes, with the potential to reduce existing workflows by up to 50 percent.

This efficiency gain could be transformative for the industry. By reducing the cost base, practices can make financial advice more economically viable for a broader range of clients. Additionally, Reddacliff suggests these technological advances could create new opportunities for entry-level advisers, potentially addressing the industry's succession planning challenges.

The impact of AI adoption could create a significant competitive advantage. "We see a big divide in top line growth and profitability in businesses who seek to invest and scale," Reddacliff notes. "They will invest in AI and the gap will widen." This observation suggests that early adopters of AI technology may gain a substantial edge in the market.

Perhaps most importantly, AI integration promises to enhance the client experience significantly. Reddacliff points out that AI technology connected to front-end client systems has the potential to transform client interactions, making them more interactive and efficient in executing tasks.

However, the transition to AI-enabled advice delivery requires careful consideration and planning. Practices need to approach implementation strategically, ensuring their teams are properly prepared and processes are well-documented before introducing AI tools.

As the financial advice sector continues to evolve, AI appears poised to play a crucial role in bridging the advice gap. For practices willing to embrace this technology, the rewards could be substantial – not just in terms of operational efficiency, but in their ability to serve a broader range of Australians with quality financial advice.

*This article draws insights from "It's a different scale': Koda deal won't set industry standard" which appeared in Professional Planner, December 2023.
Read the full article: AI steps in to close the advice gap - Professional Planner

Beyond the Koda Deal: Understanding Value in Financial Advice Businesses

The recent acquisition of a 25 percent stake in Koda Capital by US-based Emigrant Partners has sparked discussions about business models and valuations in the Australian financial advice sector. However, according to Encore Advisory Group executive chair Tom Reddacliff, while the deal demonstrates the potential value of advice businesses, it shouldn't be seen as a template for the broader industry.

"It's a different scale, client and type of buyer," Reddacliff explains, highlighting the unique position Koda occupies in the market. With $10 billion in funds under management across 40-50 businesses and a focus on wholesale and high-net-worth clients, Koda operates in a distinctly different space from typical financial planning practices.

The path to establishing a business model like Koda's isn't straightforward. "You don't just wake up in the morning and decide to replicate the Koda model," Reddacliff notes. The business requires substantial infrastructure, including internal investment capabilities, sophisticated investor structures, philanthropy services, and expertise in complex tax arrangements.

Success at this scale demands significant investment and intensive operational requirements. "To set up a firm like Koda, it's quite a high-cost base and intensive," Reddacliff points out. "Paul and Steve know what they're doing and why they set it up. It's not something I'd recommend a firm just to decide to do."

For most advice businesses, the focus should remain on developing their own value propositions within their target market segment. Reddacliff suggests that typical successful advice businesses operate at a different scale, often with $2-3 million turnover and considerably less funds under management than Koda's billions.

The distinction becomes clear when considering international investment interest. "You have to be at a certain scale to get on a plane to New York and have those discussions," Reddacliff explains. "They were talking to players that aren't well-known here at all in the Australian market."

For the majority of advice practices, success lies in understanding their market position and building value propositions that serve their specific client base effectively. Rather than attempting to emulate Koda's high-net-worth focused model, businesses should focus on developing sustainable models that align with their capabilities and target market.

The Koda deal, while significant, represents a specific segment of the market rather than a blueprint for the entire industry. It serves as a reminder that there are multiple paths to success in financial advice, each requiring its own unique approach and strategy.

*This article draws insights from "It's a different scale': Koda deal won't set industry standard" which appeared in Professional Planner, May 2022.
Read the full article: It’s a different scale’: Koda deal won’t set industry standard

Vertical Integration: The Missing Piece in Quality of Advice Review

The exclusion of vertical integration from the Quality of Advice Review's terms of reference raises important questions about the future regulation of different business models in the financial advice industry. According to Encore Advisory managing director Tom Reddacliff, this omission could hinder efforts to address both advice affordability and market clarity.

"If someone's operating a vertically integrated model like AMP, Insignia and others out there that are privately owned, we're better off knowing exactly what those business models are or aren't," Reddacliff explains. He emphasizes the importance of clear distinctions, noting that these aren't independent models and such clarity would benefit both advice affordability and market transparency.

The Challenge of One-Size-Fits-All Regulation

Reddacliff points to the limitations of applying uniform regulations across diverse business models. Drawing comparisons with more developed markets, he highlights how the UK has successfully implemented clear labeling and segmentation of different advice segments.

"In the UK they've clearly labelled or segmented their advice segments and that's what we should do here," he notes. "A classic example is risk specialist advisers; that's a clear segment of advice but it's operating under the same set of rules and education standards as a stockbroker giving advice."

Impact on Market Segmentation

The absence of vertical integration from the review's scope could have far-reaching implications. Reddacliff warns that without addressing different business models, it will be challenging to properly segment the advice market and, consequently, tackle the crucial issue of advice affordability.

This concern is particularly relevant given the industry's ongoing struggles with making financial advice more accessible to everyday Australians. The current regulatory framework's failure to distinguish between different business models and advice segments may be contributing to these challenges.

Looking Forward

The discussion around vertical integration remains crucial for the industry's future development. While the Quality of Advice Review addresses many important aspects of financial advice regulation, the omission of vertical integration considerations could leave significant questions unanswered about how different business models should operate and be regulated in the Australian market.

*This article draws insights from "'Big oversight': Vertical integration notably absent from advice review" which appeared in Professional Planner, March 2022.
Read the full article: Big oversight’: Vertical integration notably absent from advice review .

Annual Opt-In Legislation: A Watershed Moment for Financial Advice

The financial advice industry faces a transformative shift with the introduction of new legislation requiring annual ongoing fee renewals and explicit disclosure of non-independence. According to Encore Advisory Group CEO Tom Reddacliff, these changes mark "a watershed moment for financial advice," with far-reaching implications for practice valuations and client relationships.

Impact on Practice Values

The transition from biennial to annual opt-in arrangements could significantly affect practice valuations, which are already under pressure from other regulatory changes. "Practice values will go much lower for revenue where you can't demonstrate probability the client will opt in," Reddacliff explains. "The vast chasm in revenue valuations will open up even more."

Emphasis on Active Client Relationships

The new legislation places greater emphasis on client engagement and value demonstration. Reddacliff highlights that advisers will need to maintain a more "open and active" relationship with their clients. This aligns with Commissioner Hayne's vision of ensuring clients make informed assessments about the value of their advice relationships.

Key Changes and Timeline

The legislation introduces several significant requirements:

Annual written disclosure of past and future fees
Written consent for fee deductions from client accounts
Five-year record-keeping obligations
Explicit disclosure of "lack of independence" for advisers accepting insurance commissions

Business Model Implications

The changes necessitate substantial adjustments to business practices, including:

Updated compliance systems and documentation
Restructured client meeting schedules
Enhanced engagement strategies
Revised fee disclosure processes

Looking Forward

These regulatory changes signal a new era in financial advice, where transparency and active client engagement become increasingly central to successful practice management. For advice businesses, the focus must shift to demonstrating clear value propositions and maintaining strong client relationships to ensure sustainable practice valuations.

The introduction of these measures represents not just a compliance challenge, but an opportunity to reshape client relationships and business models for greater transparency and engagement.

*This article draws insights from "'Watershed moment': Annual opt-in, independence disclosure bills released" which appeared in Professional Planner, February 2020.
Read the full article: ‘Watershed moment’: Annual opt-in, independence disclosure bills released .

Annual Opt-In Legislation: A Watershed Moment for Financial Advice

The financial advice industry faces a transformative shift with the introduction of new legislation requiring annual ongoing fee renewals and explicit disclosure of non-independence. According to Encore Advisory Group CEO Tom Reddacliff, these changes mark "a watershed moment for financial advice," with far-reaching implications for practice valuations and client relationships.

Impact on Practice Values

The transition from biennial to annual opt-in arrangements could significantly affect practice valuations, which are already under pressure from other regulatory changes. "Practice values will go much lower for revenue where you can't demonstrate probability the client will opt in," Reddacliff explains. "The vast chasm in revenue valuations will open up even more."

Emphasis on Active Client Relationships

The new legislation places greater emphasis on client engagement and value demonstration. Reddacliff highlights that advisers will need to maintain a more "open and active" relationship with their clients. This aligns with Commissioner Hayne's vision of ensuring clients make informed assessments about the value of their advice relationships.

Key Changes and Timeline

The legislation introduces several significant requirements:

Annual written disclosure of past and future fees
Written consent for fee deductions from client accounts
Five-year record-keeping obligations
Explicit disclosure of "lack of independence" for advisers accepting insurance commissions

Business Model Implications

The changes necessitate substantial adjustments to business practices, including:

Updated compliance systems and documentation
Restructured client meeting schedules
Enhanced engagement strategies
Revised fee disclosure processes

Looking Forward

These regulatory changes signal a new era in financial advice, where transparency and active client engagement become increasingly central to successful practice management. For advice businesses, the focus must shift to demonstrating clear value propositions and maintaining strong client relationships to ensure sustainable practice valuations.

The introduction of these measures represents not just a compliance challenge, but an opportunity to reshape client relationships and business models for greater transparency and engagement.

*This article draws insights from "'Watershed moment': Annual opt-in, independence disclosure bills released" which appeared in Professional Planner, February 2020.
Read the full article: ‘Watershed moment’: Annual opt-in, independence disclosure bills released .

Winning the Long Game for Practices and Licensees

For financial planning to evolve into a true profession, stakeholders must focus on the long game by building trust through capability, character, and communication. These foundations represent the long-term future of advisers, practices, and advice groups.

Foundations of Trust

Capability: Trust in the adviser's expertise, professionalism, and accreditation system.

Character: Assurance that the adviser operates with the client’s best interests in mind within a fiduciary framework.

Communication: Consistency and clarity in all client interactions to reinforce trust in the advice process.

The journey to achieving these pillars of trust has significant challenges, but they define the long-term vision for financial advice as a profession.

Core Tenets for Long-Term Success

1. Pure Revenue

Practices must derive 100% of revenue from professional services, transitioning away from conflicted remuneration models. Clear communication of advice value to clients is critical for this shift.

2. Data Cohesion

An integrated financial services model using a unified advice platform with multiple data sources (e.g., financial planning, banking, accounting) can transform the client experience and reduce costs.

3. Professional Ownership Structures

Sole ownership models should give way to professional ownership structures, with advisers achieving certification under a legally recognized professional framework.

4. Proper Governance

Governance processes, including independent chairs and directors, ensure strategy formation, execution, and accountability in integrated firms.

5. Licensees as Value-Added Advice Groups

Licensees should evolve into value-added advice groups, offering professional networks, client value enhancements, and operational efficiency for practices.

Forming Your Long Game Strategy

Navigating industry instability requires a clear long-term strategy. Consider these key questions:

What will the consumer value and genuinely trust?
What’s real versus anchored in outdated biases?
What’s the most efficient and effective model to provide value to consumers?

Success depends on clear strategy, governance, trusted resources, and unwavering dedication to execution. This journey extends beyond financial planning to integrate accounting, mortgage broking, and insurance into a unified financial services profession.

Let’s focus on the long game and embrace this opportunity for transformative change. Best of luck in this noble profession—what you do profoundly impacts lives and society.

Part I: A Professional Sector Needs a Professional Structure

The financial planning sector needs structural reform to become a true profession, aligning with the standards and trust enjoyed by other professions like law and medicine. This article explores the necessary changes to achieve this vision.

Foundations of a Professional Structure

Current financial planning structures create doubt and mistrust among the public, largely due to the reliance on a licensee system. To build trust, financial planning must adopt a model where professionals are directly licensed under law or a governing standards board, similar to other professions.

Shadows of Doubt and Mistrust

The public's lack of trust stems from two core issues: the system for admitting and removing professionals, and the broader framework within which financial planners operate. Transitioning to a structure without licensees would ensure greater accountability and transparency.

The Case for Registered Advice Groups

Licensees should evolve into "registered advice groups" that live and die on their value propositions to advisers. These groups must focus on delivering valuable tools, business efficiency, and professional culture, without relying on product aggregation or soft dollar incentives.

Challenges to Overcome

1. Professional Indemnity Insurance and Liability

Many advice groups struggle with insurance availability and costs. Transitioning to a proper professional framework would enable liability schemes similar to those in accounting and law, fostering greater stability in the market.

2. Approved Product Lists

Current approved product lists are a relic of the Financial Services Reform Act (FSR) and contribute to inefficiencies. Financial planning businesses must take responsibility for product selection, leveraging external expertise to provide tailored solutions for clients.

3. Direct Data Exchange

Under a reformed system, advice businesses would submit data directly to ASIC, reducing reliance on licensees as intermediaries. This would streamline compliance and allow registered advice groups to focus on adding value rather than administrative overhead.

4. Customer Access and Trust

The current system’s complexity and costs hinder consumer access to financial advice. Reforming the structure would create a more efficient, trustworthy, and accessible system for all stakeholders.

A Professional System for a Noble Cause

Adopting a professional structure would align financial planning with global standards, such as the U.S. Investment Advisors Act. Registered professionals would meet stipulated standards, earning the public's trust and transforming the sector into a true profession.

These reforms are essential to demonstrate the sector's commitment to transparency, accountability, and consumer outcomes. With courage and collaboration, financial planning can fulfill its noble purpose of improving lives through trusted advice.

Insights

The Rise of Multi-Partner Super Firms: The Future of Financial Advice

Current Market Dynamics

The Emergence of Super Firms

The Challenge for Single Practices

Looking Ahead

Clear Labels, Better Outcomes: Learning from the UK Advice Model

The UK Model: A Blueprint for Success

Creating Fair and Proportionate Regulation

Streamlining Documentation Requirements

A Collaborative Approach

Active Advice: The Future of Financial Planning

Navigating the Changing Licensee Landscape: Expert Insights

Industry Megatrends and Market Dynamics

Key Focus Areas - Industry Megatrends

Essential Partnership Conversations

Strategic Partner Selection

Market Impact Analysis

Expert Guidance

Update: Winning the Long Game for Practices and Licensees

Foundations of Trust

Core Tenets for Long-Term Sustainability

1. Client-Driven, Active Revenue

2. Data Cohesion and Efficiency

3. Professional Ownership Structures

4. Strategy, Governance, and Accountability

5. Licensees as Value-Added Advice Groups

Looking Forward

Part II: A Professional Sector Needs a Professional Structure

The Need for Professional Structure

Challenges Stemming from FSR

Separation of Product and Advice

The Case for Individual Certification

Perceived Barriers to Certification

Role of Licensees as Value-Adding Advice Groups

Technology and the Future of Regulation

Conclusion

AI in Financial Advice: Bridging the Accessibility Gap

Beyond the Koda Deal: Understanding Value in Financial Advice Businesses

Vertical Integration: The Missing Piece in Quality of Advice Review

The Challenge of One-Size-Fits-All Regulation

Impact on Market Segmentation

Looking Forward

Annual Opt-In Legislation: A Watershed Moment for Financial Advice

Impact on Practice Values

Emphasis on Active Client Relationships

Key Changes and Timeline

Business Model Implications

Looking Forward

Annual Opt-In Legislation: A Watershed Moment for Financial Advice

Impact on Practice Values

Emphasis on Active Client Relationships

Key Changes and Timeline

Business Model Implications

Looking Forward

Winning the Long Game for Practices and Licensees

Foundations of Trust

Core Tenets for Long-Term Success

1. Pure Revenue

2. Data Cohesion

3. Professional Ownership Structures

4. Proper Governance

5. Licensees as Value-Added Advice Groups

Forming Your Long Game Strategy

Part I: A Professional Sector Needs a Professional Structure

Foundations of a Professional Structure

Shadows of Doubt and Mistrust

The Case for Registered Advice Groups

Challenges to Overcome

1. Professional Indemnity Insurance and Liability

2. Approved Product Lists

3. Direct Data Exchange

4. Customer Access and Trust

A Professional System for a Noble Cause

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