- 11 August 2007
- Reaction score
Having said that, every planner should have two basic tools in their kit bag:
1. diversification; and
2. an understanding of risk.
The FP Industry will have to change and I can see a future where fees are performance based. Volume-based commissions, whilst meaning a steady flow of income, gives the planner the overwhelming incentive to write business rather than think about the risk.
I agree with you Bushman. However, I think during the 5 year boom the understanding of risk was forgotten.
The FP industry will change, but I don't think fees will be performance based. This causes too many income problems and boutqiue FPers just won't survive.
My view is that consolidation will occur where the big guys (banks, fund managers etc) will have an even larger market share of the industry. Industry super funds are starting to do this now. Commissions will reduce because they use their own products and won't charge a commission.