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The Association of Independently-Owned Financial Planners (AIOFP) has put out tenders to eight platform providers to provide four white label platforms in an effort to ultimately lower the cost of fee-for-service to its members’ client base.
The tenders are to provide white label platforms to Personal Choice Management (PCM), which has been operating since 2001 as a private and white label administration service for AIOFP members.
PCM currently has a white label joint venture with Asgard, which contains $600 million in AIOFP client funds under administration (FUA), and previously had one with IOOF until it was sold back to IOOF a few years ago.
The tenders follow a vote of the AIOFP membership last month, in which 75 per cent of members, representing 120 practices and 1,800 advisers, voted in favour of expanding PCM’s number of joint ventures.
At the same time these members pledged to support the new white labels with their current total of $20 billion in client FUA, including $6 billion from Australian Financial Services and $5 billion from Wealthsure.
Projected annual inflows to the new white labels are estimated at $3 billion dollars, requiring these members to switch from their current providers, according to AIOFP chief executive Peter Johnston.
Terms are currently being negotiated with existing PCM provider Asgard to reflect the anticipated volumes increase expected from the tenders, Johnston said.
The PCM board has been expanded in the interim to accommodate the new white labels, and now includes Wealthsure head Darren Pawski and AFS head Peter Daly, as well as Johnston himself.
Pawski told Money Management the initiative was “about protecting our businesses in the light of the potential new legislative changes to remuneration going forward”.
“If we are able to reach effectively a position where we’re in control of the platforms from the point of view of providing us with a management service, we will be able to get down the costs of fee-for-service for our clients.”
