Dealer groups turning away planners
Independent dealer group heads claim they are not playing "the numbers game" in terms of adding planners, with some admitting to having terminated relationships with a number of their advisers as a result of the Future of Financial Advice (FOFA) reforms.
Speaking on a panel discussion at the Association of Financial Advisers (AFA) National Conference, managing director of Matrix Planning Solutions Rick Di Cristoforo said the industry had learnt that biggest isn't always the best and that some dealer groups, especially those working in the non-aligned space, were better off focusing on adviser relationships rather than aggregating their business.
"That is partially because you only need one bad case which can basically distract your whole business," Di Cristoforo said.
"We all try our best and this is not a cure for possible disaster, but the more attention you give to the personal relationships the better — especially because the advisers appreciate it," he added.
"We do our best to know our practices and by definition that is not a cast of thousands."
The swing towards quality and away from quantity as a result of FOFA has meant that particular dealer groups have willingly terminated relationships with some of their advisers.
Also speaking on the panel discussion, managing director of Infocus Wealth Management Rod Bristow said his dealer group had done a number of terminations in the last 12 months.
"It is part of any substantial change management exercise," Bristow said.
"It's the fact that change will impact different people in different ways and I think the way to be able to deal with that in a mature, confident and professional way is to articulate what's changed and why, what the potential impacts are for both parties and present a number of potential scenarios to work through that change," he added.
"One of those scenarios may be that you cease doing business altogether."
His comments reflect the trend seen elsewhere in the industry, with WealthSure recently having dropped around 100 authorised representatives as a result of the new direction it is taking.
Furthermore, a number of dealer group heads — including Synchron director Don Trapnell — said they turn numbers of practices away on a regular basis due to cultural non-alignment.
AUTHOR
Milana Pokrajac
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