Advice sector ‘ripe’ for offshore picking

According to Forte Asset Solutions' managing director, Steve Prendeville, Australia's financial advice sector is seen as desirable by foreign investors because the industry was "spared" the effects and disruption of the GFC.

"Our market is seen as ripe for disruptors given the domination of the banks, the tension between banks/advisers and consumers and the heavy margins being protected by lack of innovation and investment," Mr Prendeville said.

"A recent US visitor commented that there are 850 less dealer groups and 30,000 less advisers in the US and the market has disintermediated where once some products were the sole domain of the ultra-high net worth investors they are now being made available to all.

"The market tore away duplication and the middle men, and our market is now exposed to experienced disruptors. These disruptors come [with] technology and new business models," he said.

Mr Prendeville added that the low value of the Australian dollar has assisted new entrants overcome the "high barriers" caused by regulation and, in particular, licensing.

The advice sector has recently seen the entrance of a number of international groups, including Italian asset manager Azimut via its Next Generation Advisory business which has acquired a raft of practices including CBA-aligned Eureka Whittaker Macnaught.

The industry has also seen the entrance of multinational deVere Group which has come with the promise of creating "Australia's largest independent advice group".

Mr Prendeville said he has never before seen such an abundance of groups looking for investment opportunities in Australia.

He added that he has also had conversations with groups in the US, South Africa and Asia that are looking to enter Australia's financial advice sector.