Service providers win adviser loyalty

Service providers are an essential part of the financial planning sector and, as Jason Spits writes, while advisers may recommended diversification in a portfolio they appear to have strong preferences when it comes to choosing business partners.

Service providers are critical elements to the ongoing work of the planning sector and while some may debate which providers are most essential no planner would hang out a shingle without gaining professional indemnity (PI) insurance.

Of the commercial PI providers CGU was the leading group reported planning groups with 2700 planners (about 18 per cent of the Top 100) covered by the insurers with a further 2270 planners (around 15 per cent) covered by Axis.

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Interestingly the level of planners covered by inhouse schemes climbed to 2320 (from 2030 in 2014) or 15.2 per cent of all advisers in the Top 100, up from 2030 planners in 2014.

All the groups choosing to self-insure were licenced by a major bank or Macquarie and represented the bank in its branding with ANZ Financial Planning, Commonwealth Financial Planning, NAB Financial Planning, St George Financial Planning and Westpac Financial Planning all stating they were self-insured.

The data also showed that institutions with multiple planning businesses used a number of PI insurance providers with NAB owned groups using Axis and CGU CBA owned groups using Chubb and CGU and and Westpac owned groups using Vero.

In terms of financial planning software few groups reported using more than one system but those who did were typically non-aligned groups.

Xplan was reported by the most planners (6400 planners) as their main software system followed by Coin (4080 planners) and Midwinter, Adviser Logic and a number of bespoke inhouse systems.

This tendency to use a single supplier was less evident with research houses where planning groups used a range of providers depending on whether they were dealing with investments, superannuation or risk insurance.

Morningstar was the most used research provider for investments with nearly 6000 planners using its services while inhouse research capabilities were the second most reported provide at 3000 planners, with Lonsec providing research services for nearly 2000 planners.

Chantwest figured highly among superannuation research providers with more than 5239 planners using its services while Xplan once again was the preferred supplier for risk insurance research information with 3920 planners using the software. It was followed dedicated risk research providers Dexx&r with 1346 planners and Rice Warner with 990 planners.

Platform usage provided in the Top 100 Survey provided interesting but limited data with only 50 per cent of Top 100 survey respondents volunteering information about their use of platforms in the areas of investments, superannuation and risk.

Not surprisingly, of those groups who did provide data and were institutionally aligned, the leading platform was typically an inhouse product with AMP platforms being used by 3130 planners, BT platforms being used by 1545 planners and NAB/MLC platforms being used by 1475 planners across the total Top 100 Survey.

 Leading Service Providers

 Use by no. of advisers

 Use by no. of advisers

 Professional Indemnity Insurance

 CGU – 2700

 Axis – 2270

 Financial Planning Software

 Xplan – 6400

 Coin – 4080

 Research Houses

 Morningstar – 5970

 Lonsec – 1980

 Platforms

 AMP – 3130

 BT - 1545

 

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