Relevant to Sequoia as well.
Diverger CEO in the AFR commenting - the Financial Advice industry to me seems reminiscent of the trade school closures in the 1980s and why tradies today are paid so much in Australia compared to other countries.
I'm sure there is bias but then again not sure it would be smart to talk up the struggles given the current review.
In any case I think the future looks bright for financial advice firms with fees unliekly to decline after going up especially as the industry professioanlises - qualificaitons, a professional year for new entrants etc.
Quotes from the artcile below:
"ASX-listed Diverger says wealth management is on a growth trajectory, even as the government considers a radical overhaul of laws said to have made financial advice unaffordable to receive and unprofitable to provide."
"Nathan Jacobsen, chief executive of Diverger Limited... said he was supportive of Treasury’s Quality of Advice Review, which may recommend deregulating financial advice to boost consumer access."
Review "investigate the causes of a 40 per cent surge in financial advice fees to a median of $3500 a year"
"Mr Jacobsen said the commercial outlook for the financial advice sector was more favourable than some proponents of deregulation would be willing to admit."
“Whilst Middle Australia may not be getting financial advice any more, the demand among those willing to pay for financial advice far exceeds the supply of advisers”
“Obviously, simplifications of the regulatory environment would make things easier and better for advisers and consumers alike. But the advice businesses we work with are highly profitable and growing.”
"various financial services licences grew by an average of 15 per cent over the year to June 30. Average revenue per adviser jumped 64 per cent, while net revenue in the licensing business increased 57 per cent over the same period."
"By contrast, ASX-listed competitors Insignia Financial and AMP – Australia’s two largest providers of financial advice – have reported multi-year losses in their licensing operations, each targeting “break-even” milestones in 2024."
"The Quality of Advice Review is accepting stakeholder feedback until September 23. It is expected to hand down a final report by December 16."