The shortage of good advisers has hit RACV Financial Services (RACVFS) turnover during the last financial year, says executive general manager sales and marketing Phil Turnbull.
The Victorian-based group reported a turnover of $100 million for the 16 months ending June, 2000. The RACV operated a 16-month financial year to bring it in line with the tax year-end. In the year ending March, 1999, RACVFS turnover was $82 million.
“We were short of about five advisers for the whole year and that correlates with premium income,” Turnbull says. “We would also lose an adviser and, inevitably, they would take some money with them to their new job.”
Turnbull says the group has now made up the numbers and that will correct any falls in turnover this year.
RACVFS reported a $2 million loss for the period, with the major tax changes being to blame for the downturn, he says. “The major tax changes under Ralph, especially for investment bonds, and the introduction of GST had an impact on our bottom line,” Turnbull says.
The decision earlier this year to outsource the funds management operation of RACVFS to NRMA had an impact as the group now has to pay investment charges. This also had an impact on RACVFS’ fee structure for its products.
The division of the Victorian motoring services operation is undergoing a strategic review, but Turnbull would not be drawn on when this will be complete. “We will be down the track significantly by the end of the year as we have a very tight timetable,” he says.
The group is looking at a joint venture for the business, along similar lines to the general insurance vehicle created with NRMA last year.
RACVFS would be a sales and marketing operation while the joint venture partner provides the back-office services. Turnbull says the RACV will take a stake in the joint venture, likeit did with the NRMA insurance vehicle.
Smaller financial services operations like RACVFS are finding the rising back-office costs harder to bear due to the lack of scale and the move to find a partner has been discussed a number of times during the past few years.
Turnbull would not be drawn on who RACVFS would form a joint venture with, saying the group was not talking to any one party at this stage.
