Brokers the new competitors for advisers

A number of broking firms have already set up financial advisory and fund management arms and according to Pathfinder Asset Management executive director John Berry this trend is likely to accelerate.

Speaking at the Society of independent Financial Advisers (SIFA) conference in Auckland, Berry said the traditional broking firms still dominate the New Zealand market, with the top five firms accounting for 90% of transactions on the NZX.

Berry said they also charge high fees for transactions compared to the rest of the world, but these costs are likely to come down.

“Execution-only broking firms have only 3.5% of the market share on the NZX this year.  However, the risk is that a trading platform will come from offshore and put pressure on [brokerage],” he said.