The end of an era

TOP Financial Planning Groups amp IOOF FASEA covid-19

2 October 2020
| By Oksana Patron |
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Money Management’s 2020 TOP Financial Planning Groups research has confirmed, what everyone has been expecting, that the overall number of advisers operating under the banners of the traditionally-largest groups in the country has continued to diminish, reaching the lowest levels in five years. 

And this is happening at a time when the industry is still recovering from the Royal Commission into Misconduct in Banking, Superannuation and Financial Services and the implementation of more rigorous standards imposed by the Financial Adviser Standards and Ethics Authority (FASEA) is forcing older advisers to leave the industry but simultaneously making it more difficult for the new ones to enter. On top of this, businesses and global economies have been hit hard by the COVID-19 pandemic and partial or full lockdowns. 

Exactly five years ago Money Management reminded that domination of the banks in the financial planning industry was coming to an end. And it took less than five years for that to come to pass, as figures show.

A gradual and long-lasting decomposition of the vertically-integrated model coupled with banks’ internal governance issues and their continued exit from the wealth management space has seen the cycle come to its end, with AMP and IOOF the only institutional players still playing the game. 

A quick look at the adviser numbers this year has shown that the total number of advisers operating under all the licenses of the TOP Financial Planning Groups slipped from 14,500 last year to around 13,200. By comparison, two years ago, the Money Management survey found that the total number of planners hired by the largest financial groups stood at 16,140, which means it had returned to levels first registered in 2012 and 2013.

This year also marks five years since the Australian Securities and Investments Commission (ASIC) first launched its Financial Adviser Register (FAR). According to the FAR there were between 21,500 and 22,500 of financial advisers in the country at that time, working across 1,200 Australian financial services licence (ASFL) holders. 

What is even more interesting is that this number has not drastically changed as of July, 2020 as there are still currently around 21,800 active advisers on the FAR’s books. 

However, this should not be read in separation from the data from 2018 which indicated a total number of all employees qualified to delivered financial advice in Australia standing at 25,000.

Further to that, Money Management reported in 2019 that aligned groups owned by the big four and AMP jointly saw a departure of up to 3,000 planners, a figure far higher than 2018 when only 800 planners had decided to leave these groups.

The second thing that has changed over the last five years was the total number of AFSL holders which has rapidly gone up to around 2,100 in 2020 (from 1,200 in 2015). At the same time, the percentage of groups that had between two and 10 active planners has grown to 51% against 46% in 2018 which partially confirms a further dispersion of advisers in the wake of the end of the collapse of the once-prevalent model.


AMP Financial Planning (AMP FP), which has been traditionally the largest group in Australia for years, alone saw a departure of 700 advisers over the span of five years, including around 250 planners who departed within the last 12 months. 

Be it the controversial changes made to its Buyer of Last Resort (BOLR) policy in 2019, which earned the company a class action lawsuit filed against AMP FP, or a recently-announced culture revamp strategy triggered by poor handling of internal scandals, this year’s results have only confirmed that problem-ridden AMP saw the loss of another 500 advisers spread among its four planning groups (AMP FP, Charter Financial Planning, Hillross Financial Services and ipac Securities) counting year-on-year.

At the same time, the second-largest player by adviser numbers, IOOF, has been on the opposite end of spectrum, consequentially growing its business, with a recently-announced acquisition of 100% of NAB’s MLC Wealth for $1,440 million, which according to its chief executive, Renato Mota, represented “a highly complementary business of the quality”. 

But, IOOF stressed that, even though its doors would remain open, it would ultimately be up to MLC advisers to decide on their future fate and whether or not they wish to join one of the IOOF’s existing licenses, helping to create the new largest group in the wealth management sector in the country. In the meantime, it is worth remembering there were already a handful of other licensees, including those which are publicly listed, who had too attempted to lure in MLC’s advisers.
So where exactly would this move place the company on the advisers’ network map?

According to Money Management’s 2020 survey, there were almost 1,300 advisers (1,295) altogether operating under IOOF’s umbrella, a figure way lower when compared to the data from a year ago (1,600 advisers) but still higher than in 2018 (940 advisers). 

This could be explained by the fact that last year IOOF completed an acquisition of four ex-ANZ groups (RI Advice, Millennium3, Financial Services Partners and Elder Financial Planners) which translated into an intake of close to 650 new planners. However, a few things have changed at IOOF since then and even though the advisers’ numbers at this point in time were less impressive, IOOF’s aspirations are far reaching. 

First of all, in 2019 the firm announced a wind-up of Elders FP (around 70 advisers) business, due to difficulties with generating the income required to cover higher regulatory and insurance costs.

As of July, 2020, the four groups historically owned by IOOF (Consultum Financial Advisers, Lonsdale Financial Group, Shadforth Financial Group and Bridges Financial Services) had jointly around 700 advisers, which represented only a slight drop of 8% compared to the same period a year ago. 
What has changed though was a departure of one of its key groups, Ord Minnett, which according to the ASIC’s FAR had around 240 planners, after IOOF had completed the sale of its 70% stake in the company in 2019. 

At the same time, ex-ANZ RI Advice and Millennium3 had managed to slightly grow its advisers’ ranks by 3% and 4%, respectively. Following this, Financial Services Partners (FSP), with its 140 advisers, has been nominated by its current owner as one of the three licenses, next to Executive Wealth Management and Astute, to be soon closed down. Although it does not necessarily mean a complete departure of those advisers, since IOOF made it clear that all advisers licensed under any of these brands would be encouraged to join their preferred existing IOOF license, the firm made no secret that its renewed approach would most likely see more advisers but working under fewer licenses and brands.

The most important milestone for the new growing wealth management giant was its acquisition of the MLC wealth management business. In the announcement made to the 

Australian Securities Exchange (ASX) IOOF said it estimated MLC’s advice segment to have close to 540 advisers comprising aligned (including GWM Wealth Services, Apogee, Godfrey Pembroke) and direct advisers including MLC Advice.

At the same time, IOOF made it clear it was looking to become the number one retail wealth manager by funds under management, administration and advice (FUMA), estimated at $510 billion, and also the number one advice business in terms of adviser number with an estimated growth to close to 1,900. 

As far as other banking groups were concerned, Commonwealth Bank of Australia, which last year declared it would close Financial Wisdom by June 2020 after announcing the sale of Count Financial to CountPlus for $2.5 million, has been left effectively with only one major financial planning group, out of four previously, which has now around 250 planners and saw a sharp decline of almost 50% compared to a year before.

Similarly, ANZ has only one group, ANZ Financial Planning, with 180 advisers on its books, down from almost 240 advisers two years ago.

Earlier this year, MLC Wealth announced the launch of TenFifty Financial Group, its new advice business which encompassed Garvan/GWM Wealth Services, Apogee and Meritum. According to the 2020 Money Management’s survey, all three groups represented a decline in adviser numbers compared to last year by 29%, 46% and 56%, respectively.

As of July, 2020, NAB also still owned NAB Financial Planning which had 131 advisers, down from 276 in 2019 and 449 in 2018. 


With a continued outflow of planners from institutionally-aligned groups, the 2020 survey saw yet another change in the mix-up of the top 10 groups, with Synchron now becoming the second largest planning group in Australia by adviser numbers, after AMP FP, if excluding SMSF Advisers Network.

While SMSF Advisers Network – a group owned by the National Tax and Accountants’ Association (NTAA) – has almost 850 advisers on its books, according to the 2020 survey, the group had no active authorised representatives that were engaged as financial planners as their primary role and all advisers were accountants.

At the same time, both Commonwealth Financial Planning and AMP-owned Hillross, which slashed its numbers of planners from last year by almost a half to around 250 and a 20% to 233 planners, respectively, fell down the ranking and found themselves outside of the top 10.

On the other hand, Sequoia-owned Interprac Financial Planning climbed up the list after it successfully grew its advisers number year-on-year by 19% to more than 300 as of July 2020, becoming yet another non-aligned financial planning group which made it to the top 10.

Ex-CBA group Count Financial, which was sold last year to the ASX-listed CountPlus, also grew its adviser network by approximately 12% earning the 10th spot in the TOP Financial Planning Groups ranking.

The other two significant groups in the top 10 were Morgans Financial Limited and Merit Wealth which had around 500 and 326 advisers, respectively, however in case of both companies these numbers did not necessarily mean their advisers, as according to ASIC’s definition, were all financial planners. Of approximately 500 of active authorised representatives at Morgans there were around 200 financial planners while the remaining 300 were investment and stockbroking advisers. Following this, Easton-owned Merit Wealth reported that of its 326 registered advisers, 291 were actually accountants. 

According to Money Management’s survey this year, Easton Investments had jointly almost 600 advisers (592) spread across its three licenses: Merit Wealth, GPS Wealth and The SMSF Expert which makes it the third-biggest group by adviser number in the country, after AMP and IOOF.


While eyes of everyone in the industry were firmly set on the final manoeuvres of banks exiting wealth management space, the last 12 months also saw a number of changes across mid-tier sized groups.

First, CountPlus’ chief executive, Matthew Rowe, announced by the end of 2019, that its associated group Total Financial Solutions, which accounted for over 60 authorised representatives (ARs) would cease its operations in 2020 while its advisers were offered the opportunity to join Count Financial.

In June, ASIC also cancelled the AFS licence for MyPlanner Professional Services, which had mid-2019 over 80 advisers as, according to the regulator, it “was no longer operating a financial business”. The move followed its earlier decision which had imposed additional conditions on MyPlanner’s licence due to the regulator’s concerns that MyPlanner’s representatives provided poor financial advice while the licence was unable to adequately monitor and supervise its representatives. 

On the other hand, the recent months saw an ongoing consolidation among mid-tier groups, with the longest and most complex being the acquisition process of Madison Financial Group, which had around 90 advisers as of July, 2020, and which finally found its new home with Clime Investment Management in June.

The ASX-listed Sequoia Financial Group, which currently operates a number of AFSL licenses including Sequoia Wealth Management, Interprac and Libertas – collectively representing almost 400 planners  – was also considered a potential bidder for Madison. 

The firm, which was recently busy completing the acquisition of the financial planning elements of Yellow Brick Road, already made a few other purchases in the market. In June, the firm acquired the advice elements of Philip Capital Limited and in July it announced a purchase of assets agreement with Total Cover Australia (TCA), via the company’s wholly-owned subsidiary InterPrac, which was Sequoia’s fourth purchase of a retiring Interprac’s adviser portfolio over the last three years. 

Following this, the firm said it would continue to look for similar opportunities given many ex-advisers of banks were on the lookout for new employment opportunities rather than considering a self-employed option. 

In March, the market saw another boutique dealer group merger of Spark Financial Group and Aura Wealth Australia, with the latter having managed to grow its advisers number by 28% to over 50 compared to the prior year. Spark also has another license, Axies, which currently has 35 authorised representatives. 

In May, Queensland-based financial advice business Highfield Group announced that Ausure Financial Services, which according to the 2019 survey had around 50 advisers, had merged with Insight Investment Services, part of the Highfield Group which also owns Futuro Financial Services. It was announced that the merged group would trade as Insight with the merger being part of Highfield’s ongoing strategy to build scale and stay ahead of the market. As of July 2020, Futuro Financial Services and Insight Investment Service had jointly approximately 100 financial planners.

When asked about the changes in adviser numbers at both Futuro and Insight, Paul Kelly, managing director at Futuro, told Money Management: “We have largely moved away from simply licensing accountants for SMSF [self-managed superannuation funds] only so those left are usually business owners along with the FP advisers in their business. This saw less accountants in both number sets for the AFSL’s.

“The decrease was largely due to that and to a few moving to Insight but we did a lot of work in the last few years to help firms with succession so this happened. 

“I think the industry has experienced a loss of good people due to FASEA and this was the case with some of these people. Some sold externally and a number sold internally causing larger firms.”


With COVID-19 still in play and hard-hit economies coupled with higher market volatility, it is definitely not a good time to make any predictions, even though the majority of groups interviewed by Money Management said that the pandemic had not directly impacted their businesses. 

Certainly, this year’s survey has provided hard evidence that the banks’ dominance in the wealth management sector is well and truly over and this era has come to its end. 

But, on a positive note, the market saw an intensified consolidation among mid-sized independent groups and many have continued to diversify their businesses and operate, or look to operate, more than just one licence. 

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