Research undertaken by the overseas-focused division of Old Mutual Wealth, Old Mutual International, has highlighted that 54% of international financial advisers are transforming their business model away from upfront remuneration and in the direction of a model that includes more recurring revenue streams.
The research forms part of a new white paper from Old Mutual International (OMI) on what it calls the “evolution already under way” in the international advice market. It includes market perspectives from strategy consultants Capgemini Consulting UK.
Steven Levin, chief executive, investment platforms, Old Mutual Wealth, said that the transformation taking place in the international advice market is positive and will “help ensure the future success and credibility of the sector”.
But he warned that those that fail to embrace change will be “left behind”.
The OMI report states that the combination of regulatory convergence and shifting client expectations can create new opportunities for international advice businesses and if tackled correctly, the subsequent threats associated with these changes can be managed, leading to advisers adapting and thriving.
“Forward-thinking advisers will be the long-term winners, and those who do not embrace change risk being left behind,” warned Levin.
‘Client expectations are evolving’
OMI points out that while all international markets are not progressing at the same speed of regulatory change, globally, “client expectations are evolving”, demanding greater transparency and value.
Advances in technology are also contributing to a change in expectations, with clients being able to access more information and demanding greater access to online services, OMI said.
OMI said that it is speaking with a number of international advisers to help shape its new “Future Fit” programme of support.
‘Lower cost of advice’ model
Capgemini said that international advisers need to review their business practices and leverage technology where possible to ensure they achieve “a lower cost of advice” model and at the same time remain profitable and sustainable.
Rod Bryson, principal, wealth, long term savings and insurance at Capgemini Consulting UK, said that today’s clients are in a better position to “question and challenge” – but also to “appreciate the value a financial adviser can offer”.
“Financial advisers across many international markets are becoming acutely aware of the need to evolve and transition their business, and it is easy to see how this evolution might snowball,” added Bryson.