BT Financial chief executive Rob Coombe thinks more consolidation is on the cards in the fin planning sector as customers and staff seek sanctuary in large organisations.

As part of a wider shake-up of the wealth management industry, Coombe predicts that over the next one to three years, boutique financial planners will suffer as a result of the financial crisis.

He tells The Australian: "During periods of uncertainty, people will gravitate towards known and trusted brands. In bull markets, it doesn't matter, but in economic downturns, when things get tougher, the better brand names will do better."

If people prefer getting financial guidance from large firms, smaller agencies will look to merge, or be taken over, because their revenue from funds-under-advice will fall, according to Coombe, who adds that BT will be on the acquisition trail itself.

Is Coombe correct? Is it really the beginning of the end for boutiques?

Sarah Wapling, a practice leader at Link Recruitment, says there has been a notable increase in the number of enquiries from financial planning businesses about selling their practices.

“Whilst the stockmarket was running at record highs, and financial planning revenues were also at high levels, not many principals would consider selling. However, with significantly depleted revenues, practices who were holding off succession planning are now open for discussions on selling.”

Kasturi Pathak, a recruitment consultant at Reed Banking and Finance, says some small firms prefer to merge with each other. “Mergers are happening between the one or two-man-bands. Jobs are created by this because the new company will have better resources to hire paraplanners and new business advisors.”

And Pathak thinks more boutiques are currently looking to join dealer groups, rather than being taken over completely by a large institution. “This retains most of their independence but means they have an established brand name to take advantage of. They’re not sacrificing much autonomy, but they’re getting a better foundation,” she adds.

Despite his forecast of industry consolidation, Coombe remains upbeat on overall employment opportunities in fin planning, predicting “unprecedented demand” for their services over the next decade.

Wapling comments: “I think that, as the public becomes more aware of financial planning and its benefits, there will be an increasing demand for financial planners. But I’m not so sure about ‘unprecedented’ because the industry is still trying to make itself a credible profession and there is the occasional group whose behaviour brings down the industry.”

In the meantime, senior financial planners, with established clients, are in demand. “The most roles that we have available for financial planners at the moment do involve them being able to move their client base. During the golden days, to find a financial planner with a movable base was almost an impossibility,” says Wapling.

And experienced planners at boutiques might find it increasingly temping to jump ship. Wapling explains: “With decreased revenues, these financial planners are looking to take shelter within larger practices so they don’t have to pay expenses such as rent, salaries, etc.”