Banks split on demand for personalised advice

Institute of Financial Advisers chief executive Fred Dodds said it was hard for new advisers to get started in investment planning.

“It takes time and quite a bit of it to get sufficient FUM to generate an income that will leave a decent income for the new entrant –$20 million at, say 0.80, is $160,000 of ongoing fees, of which a chunk would be held by the independent principal … and how long would it take to get to $20m?”

He said it had been suggested that big providers, such as banks, could be a stepping stone or “kindergarten” for those who wanted to move to independent practice..

But a survey of banks reveals that they are not hiring great numbers of advisers. ASB is recruiting Auckland advisers but has only hired four across the country in the past year. ANZ’s number of AFAs has held steady at 110. Westpac has about 50. BNZ has 69 AFAs, of whom three are newly qualifying.