[Weekly Wrap] Why the financial advice world is great

What makes the world we work in great is the people involved. Here is my story why that is true.

Friday, August 1st 2014, 11:51AM

That was brought home too me this week with the news that Peter Hensley died on Tuesday. Peter, or Henso as he was known, was a wonderful person and his death a tragic loss. The comments coming through on the obituary I wrote reinforce what a great bunch of people we work with.

As I sit her writing this I reflect back on the four conferences I have been to in the past fortnight. It is great to go to these events and catch up with old friends, staff and acquaintances.

Now back to business. One of the themes coming through in the news is the changing shape and make up of the financial adviser space. Smaller firms are disappearing into bigger, often funds management driven groups. A good example of this is today's story about how Diversified Investment Strategies has essentially folded with one shareholder moving to Fisher Funds and taking most of the firm's clients with her.

Recently we have seen Goldridge taken over by AdviceFirst which is majority owned by AMP. This move is also interesting as all the Goldridge advisers are now salaried advisers. We understand some other groups have moved to a salaried adviser model too.

Then we have AMP ramping up its 360 business. We are hoping to talk to AMP later today to find out more about what is happening here.

Then there is Australian firm van Eyk wanting to grow its business in New Zealand.

The debate around fees v commissions is a bit of a perennial topic with financial products, and I had an interesting discussion about it this week.

It started when I was talking to Sovereign about their plans to recharge its health insurance business. During our discussion the cost of specialists came up and Joyce Au-Yeung said Sovereign, like Southern Cross, wanted to keep specialist fees in check. Apparently there can be price differences of up to 300% for the same procedure. Clearly some specialists are gaming the system.

A couple of days later I visited my GP, who is, or has been very active in the politics of health care. When I asked him about it he was clear that some of his specialist colleagues adopted unacceptable positions when it came to charging for their services. What was really piqued my interest was his assertion this call came about when specialists moved from a salary model to a fee-for-service one.

Often we hear financial advice can't be a profession until it adopts a fee-for-service approach like doctors and lawyers. I'm not so sure that is true.

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