Financial advisers are taking on more younger “accumulator” clients amid a generational change in the market led by KiwiSaver, according to Consilium chief, Scott Alman.
Alman said the “penny is dropping” among many advisers that relying on older, if wealthier, retiree clients could impact the long-term sustainability – and value – of their businesses.
“We’re seeing more advisers bring on accumulator clients and KiwiSaver is fantastic way to do that,” he said. “Retirees might be wealthier but there’s also a decumulation risk as they will be drawing down on their funds.”
Building a more diversified client book is useful, too, in succession planning for an industry that is itself still skewed to retiree-adjacent average age despite an influx of younger advisers.
“We’re still talking to many advisory groups that want help with succession planning,” Alman said.
He said the Consilium adviser business consulting service has been a key factor in the company’s growth trajectory over the last 12 years from scratch to now weigh in at $9 billion of assets across its platform, Synergy discretionary investment management services (DIMS), KiwiSaver scheme and more recently launched Evidential fund brand.
The Christchurch-headquartered business counts about 150 advisory firms (or about 7 per cent of the total licensee market) in its orbit today, representing up to 600 financial advisers.
Consilium has hit scale as the “champion of professional financial advice”, Alman said.
And he said the group was poised to build further scale and market share over the next couple of years amid rising demand for financial advice and the professional support services the firm has specialised in.
“There’s a strong need for independent financial advice and we’re good at helping advisory businesses grow,” he said.
After a rocky reboot a few years ago, the core Consilium investment platform is now functioning smoothly with a pipeline of improvements scheduled such as the recent introduction of ‘virtual banking’.
“We’re also going to launch a wrap app this year,” Alman said, “which will create a better investor experience.”
Consilium is considering, as well, adding more funds to its Dimensional-in-a-PIE Evidential product suite, that has accrued more than $1 billion across the current two-fund range in a little over two years.
He said the business also has development plans for its KiwiWRAP KiwiSaver scheme that is starting to gain traction among advisers after a slow start.
KiwiWRAP is on track to hit $150 million in funds under management next month to double in size year-on-year.
But while the Consilium KiwiSaver targets larger-balance clients looking for bespoke investment solutions, Alman said the broad growth of the retirement savings regime has triggered a huge boost in demand for financial advice.
“We’re seeing more young advisers enter the industry by offering KiwiSaver advice,” he said, with the potential to grow into diversified wealth management businesses as their clients’ needs change over time.
Consilium has also grown in step with the increasing service demands of its adviser clientbase, now housing some 50-plus staff in a new Christchurch premises.
Founded in 2012, Alman said the group is still a young business; an accumulator.