Royal commission to drive IFA ascendancy: UK researcher

Following the royal commission from afar, analysts at Global Data said the high-profile discoveries of misconduct in vertically integrated financial advice providers are likely to influence consumer behaviour.

“Customers are likely to think twice about the type of provider they opt for,” said Global Data wealth management analyst Heike van den Hoevel.

“This will drive growth of the independent advice market.”

The analyst also tipped considerable “headache” for the banks’ wealth management arms in advisers moving away from aligned channels and suggested the IFA sector may be a beneficiary of demand from new cross-sections of the community.

“Financial planners are likely to ditch the big four banks (Commonwealth Bank of Australia (CBA), Australia and New Zealand Banking Group (ANZ), National Australia Bank (NAB) and Westpac Banking) and AMP to set up their own businesses,” she said.

“Even demographics that are not typically drawn to independent financial advisors will find themselves more likely to opt for independent advice when they learn their trusted banking partner has been pushing products that are not in their best interest.”