by Susan Edmunds
Many advisers have said that the combination of increased interest in the sharemarket, prompted by the Government sell-off of state-owned assets, and low interest rates, were driving people to seek out advice about investing in equities in particular.
Hamilton Hindin Green director Grant Williamson told media this week that IPOs were “cream” for broking houses. The level of IPOs is higher than has been seen in decades. Other investment advisers said the market was more buoyant than it had been in a decade.
IFA president Nigel Tate said the market for financial advice was about to take off. Those advisers who had stuck around and got through the upheaval of new regulation would be well positioned to make the most of a period of growth, he said.
“In terms of anything in the financial sector, if you’re coming in now, you’re starting at a very good time because the regulation has been established. As long as you go into the right pathway, you’ve got a good future.”
He is teaching the Massey University diploma course this year and said the majority of the 48 students would become financial advisers.
Marketing consultant Mike Moore, who helps many financial advisers sell their businesses when it comes time to retire, said it was hard for new investment advisers to start from scratch. Most newcomers to the industry would want to buy the books of an existing adviser.
He said the new regime was so restricted that most new advisers found themselves in a situation where they had to stick to the party line of a particular business, offering stock standard advice. “It’s not that interesting really.”
He said he was seeing more people who wanted to sell. Risk advisers often sold down part of their client base so they could focus on a select few. Most of the investment advisers left in the industry who wanted to sell were people who had “skeletons in their closets”, he said – clients they’d advised to put money into finance companies or other investments that did not work out well.
“They don’t want to expose themselves to ridicule by selling the business without fixing that first, but in reality you can’t fix it. Some [who have made mistakes] are trying to figure out a way to sell without having to disclose that.”
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