The make up of an owner-occupied advisory business

A survey of the members of SiFA provides a snapshot of the group, made up primarily of owner-operated financial advisory practices.

Wednesday, November 13th 2013, 6:18AM

Nearly all SiFA members operate as investment advisers and have AFA designations.

In total the group’s membership has more than $1 billion of funds under advice, and on average 108 clients each.

While the average funds under management is around $30 million per adviser there was a very wide dispersion with some advisers having very big books of business.

Only 8% of members use a commission-only remuneration model, with the majority, 54%, describing their practice as "mostly fee-based, but with some commissions", and the balance described themselves as fee-only advisers.

Undoubtedly the biggest issue facing advisers is regulation and the added burden it places on their businesses.

They were asked if they were prepared for a visit from the FMA. A third said "yes," while the majority (64%) replied "somewhat."

SiFA has been one of the most active professional associations presenting submissions to government, officials and the FMA over regulatory changes.
Murray Weatherston, who has led much of this work along with Robert Oddy, says SiFA has probably been the most active association and “punching above its weight.”

The other concern for advisers was the actions of the banks in the market and how they can operate in the investment advice business by using non-AFA staff under the protection of a QFE.

Surprisingly KiwiSaver didn’t feature highly as a service offered to clients.

SiFA chairman Scott White said KiwiSaver was “the greatest opportunity for single shingle advisers.”

One of the concerns advisers expressed over KiwiSaver was the low rate of trail commission, and there was a view expressed by some advisers that managers would remove trail in the future.

Around half the members provide DIMS services. The rules around DIMS are likely to change next year with advisers needing to be licensed to offer a personalised DIMS service to clients.

The next SiFA conference, which will be in Taupo, will celebrate its 20th year as an association.

« Rich advisers will get richer

IFA working on pro-bono offering »

Special Offers