The penny drops: FOFA legislation is causing consolidation due to increased regulation

The Financial Planning and Investment Advice industry has undergone significant changes over the past five years. The Future of Financial Advice (FOFA) legislation was introduced in July 2013 in response to a series of scandals involving significant wealth loss for many investors, brought about by poor financial advice from industry professionals. The FOFA legislation aims to address issues relating to the industry’s professional integrity, transparency, and prioritising the client’s best interests. Although some industry operators initially opposed the regulations, the government eventually made the changes compulsory. Some larger groups implemented the regulations early and shifted to a fee-for-service remuneration more.

Industry Statistics & Market Size
Annual Growth 13-18
Forecast Growth 18-23

Industry Threats & Opportunities

  • The industry’s structure is expected to continue changing due to regulatory reforms
  • The popularity of SMSFs has grown rapidly, which has supported industry growth
  • Industry profitability is expected to fall as firms offer better prices to attract clients
  • Industry Report - Industry SWOT Analysis Chapter

    The Financial Planning and Investment Advice industry is in the mature phase of its life cycle. Industry value added, which measures an industries contribution to the overall economy, is expected to increase at an annualised 0.5% over the 10 years through 2022-23. This represents an underperformance compared with real GDP growth of 2.5% over the same period. This indicates that the industry is growing at a slower pace than the overall economy. Recent regulatory changes have contributed to the industry's shift to this mature phase.The changing regulatory environment has caused uncertainty in the industry and larger financial services firms have capitalised by acquiring smaller competitors. Des...purchase to read more.

    Additional Insights for the Financial Planning and Investment Advice Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Financial Planning and Investment Advice Industry are

  • Ability to effectively communicate and negotiate
  • Must have licence
  • Having a loyal customer base
  • IBISWorld analysts also discuss how external factors such as High income earners and All Ordinaries index in the Financial Planning and Investment Advice industry impact industry performance..

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    What's in this report

    What is the Financial Planning and Investment Advice Industry?

    Establishments in the industry provide financial planning and advice to clients.

    Industry Products
  • Superannuation and retirement advice
  • Loan and investment advice
  • Self-managed super fund advice
  • Tax advice
  • Other services
  • Industry Activities
  • Financial planning
  • Investment advising
  • Financial asset investment consulting
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • High income earners
  • All Ordinaries index
  • Real household disposable income
  • Population aged 50 and older

  • Current Performance
  • Funds under advice
  • FOFA reforms
  • Industry scandals
  • Chart: Revenue Growth

  • Industry Outlook
  • Opportunities and threats
  • Higher industry standards
  • Table: Financial Planning and Investment Advice Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Financial Planning and Investment Advice Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Residential Property Operators
  • Consumers

  • Key Selling Industries
  • Accounting Services
  • Advertising Agencies
  • Technical and Vocational Education and Training

  • Products & Services
  • Superannuation and retirement advice
  • Self-managed super fund advice
  • Loan and investment advice
  • Other services
  • Tax advice
  • Chart: Financial Planning and Investment Advice Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Highest income quintile
  • Fourth income quintile
  • Third income quintile
  • Second income quintile
  • Lowest income quintile
  • Chart: Major Market Segmentation for the Financial Planning and Investment Advice Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Wages
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Financial Planning and Investment Advice

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Financial Planning and Investment Advice Industry

  • Industry Globalization
    AMP Limited, IOOF Holdings Ltd, Westpac Banking Corporation, Commonwealth Bank of Australia,
  • Table: AMP Limited - financial performance
  • Table: IOOF Holdings Ltd - financial performance
  • Table: Westpac Banking Corporation - financial performance
  • Table: Commonwealth Bank of Australia - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Financial Planning and Investment Advice Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Financial Planning and Investment Advice Industry
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Funds Under Advice
  • The value of funds placed for investment purposes through a financial adviser or planner.
  • Investment Platform
  • Investment platforms allow investors to hold and manage a portfolio of investments.
  • Self-Managed Superannuation Fund (Smsf)
  • ATO-regulated superannuation entities that have less than five members, all of whom are trustees or directors of the corporate trustee.
  • Trailing Commissions
  • Commissions paid to advisers and planners on an ongoing basis while the business they have generated remains in force.
  • Wrap Account
  • An account which consolidates various investments under one administrative umbrella.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Financial Planning and Investment Advice market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
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    This report on Financial Planning and Investment Advice:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Financial Planning and Investment Advice market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Financial Planning and Investment Advice, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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