Diverger has added 160 self-licensed advice firms in the first half of 2022/23 as it targets achieving net revenue of $45 million by FY25.
Announcing its results for the six months to 31 December, 2022, the firm said it was working towards a FY25 growth strategy through growing scale, service expansion and technology-driven transformation.
In the half-year, the firm acquired AFSL Compliance and a client base of 160 advice firms which had helped it to “establish a solid footprint in the fast-growing self-licensed sector of the advice market”. Prior to the acquisition, Diverger had five firms in that space.
It also took a minority 35% investment in advice firm McGregor Wealth Management and was in negotiations with an “active pipeline of opportunities”.
“Continued growth in membership firms and addition of 160 self-licensed firms, representing a large, sustainable client base of more than 311 licensed/self-licensed advice firms and 1,352 subscribing accounting firms,” it said.
There was an attractive growth market, it said, to provide services to professional firms thanks to growth and capacity constraints at firms which was creating a higher demand for Diverger’s services.
This was the result of a variety of factors including reduction in advisers, reducing impact of regulatory change, ageing demographic, economic environment and firms being too small to internalise all their required capabilities.
With this in mind, Diverger planned to increase its scale and capability through “accelerator acquisitions” and growth momentum, expand services available per customer by investing into advice practices and growing back-office services and transform the customer experience with customer analytics and service automation platform.
Underlying profit was $2.9 million, down 13%, following lower revenue growth in challenging market conditions, higher operating costs and planned investment to support the growth strategy. Net revenue was $30.15 million.
While it expected to see a market skew in the second half of the year, it noted uncertain market conditions may still impact the rate of short-term growth and expected a flat underlying earnings outlook.
