CBA back to $45-50 again soon?, page-486

"Do you think the financial advice review will change anything e.g. open up wealth management for big banks again (just after most have gotten out of it) or is wealth management too small?"

@tanon,

I'm not sure; anything is possible when it comes to the dumb things that banking executives can do in the name of pursuing "growth" ... and going forward, apart from some margin relief as a portion of their mortgages re-price from the generous honeymoon rates of the past two years, the sharp rise in interest rates will make growth via their loan books very hard for the banks.

So, who knows? After zigging on financial advice strategies when they should have been zagging, and the zagging when they should have been zigging, it would come as no surprise if they now went the other way again.

For "growth", you know


But if your line of questioning comes from an interest of investing in financial advice/wealth management businesses yourself, then I definitely think you are onto something because every large step-function change in regulatory settings in any industry leads to unintended consequences.

And in the case of wealth management, one significant unintended consequence of the regulatory scimitar having cut a swathe through the wealth management industry over the past few years is that it caused a massive exodus of financial advice supply, leaving the wealth management industry badly under-serviced today (try find a decent financial advisor at a half-decent rate today).

If I was a late 20-year old, or early 30-year old today, and with a commerce/finance qualification, I'd look to carve a career in the financial advice /wealth management profession... it's reputation might still be a bit tainted now due to the legacy issues, but that will fade.

Already prudent and good-quality financial advisors are in great demand and that demand for advice is only going to intensify with the ageing demographic and the inter-generational transfer of wealth in the years ahead.

But given I'm rather far off being a late 20-year old, I have been looking to arbitrage this wealth management opportunity in a different way, namely buying shares in companies involved in providing financial advice and/or ancillary services in the financial advice and wealth management industries.

(Who knows, in a few years' time I might find myself selling my shares in those financial advice/wealth management businesses to a bank?

I wouldn't be in the least surprised at that kind of outcome).


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