Rodney Adler says distribution is king when it comes to financial services.
And he is prepared to put his money where his mouth is. Adler is back in financial services saddle after selling out his stake in FAI last year, but this time financial advice is his primary focus.
Adler has teamed up with former FAI executive Dr Frank Wolf to form Financial Services Partners (FSP) which has in turn taken 50 per cent stakes in two adviser groups, NOW Financial Services and INSCORP.
Adler told Money Management he would commit up to $10 million to develop FSP, including master trusts, badged investment products and a full training program for advisers. He also says he is considering adding another planning group to the fold.
“Distribution is the key to financial services and there are immense opportunities,” Adler says. “There is no dominant player, few well-known brands and likelihood of further rationalisation.”
While Adler has a strong reputation as a deal maker, he says his greatest strength lies in building up businesses.
“As we showed with FAI, we are business builders,” he says.
“With One.Tel, we converted a $5 million investment to a company worth about $1.72 billion in a short space of time. Anaconda Nickel is another example, we bought the dirt the mine was built on and built it into a group with a market capitalisation of $600 million. FAI Life started out with about $600,000 and was floated at $150m million.”
NOW Financial Services was formed about two years ago by a group of Legal & General financial advisers and is headed up by another former FAI executive, Geoff Rimmer. Melbourne-based INSCORP has about 250 advisers and is headed up by Ray Snell.
Collectively, the two groups have more than 350 advisers and about $500 million under advice as well as about $25 million a year in annual premiums. Adler reckons the group is one of the five biggest financial planning groups in the country.
He stresses the 50 per cent investment in the two groups is not a control arrangement but a partnership with the 350 advisers who drive the business.
There are plans afoot for the NOW advisers to take equity in the business.
“As a business, we are only as good as our advisers,” Adler says.
