The rules have changed

TOP Financial Planning Groups TOP100 financial planners consultum financial advisers Lonsdale Financial Group Shadforth Financial Group bridges financial services ord minnett IOOF Millennium3 Financial Services RI Advice FSP Financial Services Partners Elders Financial Planning EX-ANZ groups

26 September 2019
| By Oksana Patron |
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This year’s Money Management’s survey on TOP Financial Planning Groups has found that one of the key issues occupying financial planners’ minds in recent months has been the change of rules being driven by the Royal Commission and how to navigate them.

With the upcoming end of grandfathered commissions, financial planning groups have realised they will need to shift their focus from planner numbers to the quality of their client base. This means the groups will also need to put more effort into reconsidering their business models particularly the development of a sustainable strategy on how to charge clients.

Moving forward, financial planners will need to become more pragmatic about the clients they choose to service and how they will build the commercial relationships with those clients in the future.

The speakers at the recent Money Management Future of Wealth Management — Advice conference said that the real problem for advisers is not how they currently charge their high net worth clients but how they are going to charge mid-tier ones and what role the asset-based fees have played in it so far.

This will lead planners to re-evaluate their relationships with licensees and, as a consequence, the industry will continue to see the commercial foundations of dealer groups evolve.


With the ongoing departure of banks from wealth management, adviser movements between licenses, a growing trend towards self-licensing and a further push from the

Financial Adviser Standards and Ethics Authority (FASEA) towards higher educational standards for both current and new financial planners, the general consensus is that it is just a matter of time before the industry sees a massive decrease in the number of advisers.

But what are the numbers actually telling us this year?

Unsurprisingly, the results from Money Management 2019 TOP Financial Planning Groups survey confirmed that the aligned groups, owned jointly by the Big Four and AMP, suffered the most. 

The last couple of months saw a growing number of reports from institutions on acquisitions or divestments of part of their businesses as well as announcements regarding shutdowns instead of sales.

Altogether, the aligned groups which were traditionally owned by the Big Four and AMP saw a departure of close to 3,000 planners (2,896), well up on the combined loss of 800 planners reported last year. According to the survey, Westpac and Commonwealth Bank (CBA) let go of 930 and slightly over 800 planners, respectively, this year.

And perhaps defying the publicity, the survey confirmed that AMP continued to be the largest player in the space, despite a drop in its overall number of planners by around 220 professionals to 2,320.

AMP had quite a busy period over the last months during which the firm was not only recovering from the findings of the Royal Commission into Misconduct in the Banking,

Superannuation and Financial Services Industry, but also using that time to reassess its strategy with an overarching outcome to have “fewer but more productive” advisers in its ranks.

Its largest financial planning group, AMP Financial Planning, managed once again to be the single-biggest financial planning group across the industry, even though it posted an 11.4% year-on-year drop in planner numbers.

All the remaining groups operating under AMP’s umbrella continued to trim planner numbers, with Charter Financial Planning, Hillross Financial Services and Ipac Securities reporting a joint drop of 5.5%, counting year-on-year.

While AMP was recovering  and focusing on the quality planners,  its rival IOOF, managed to significantly grow its ranks, with a big help coming from completion of the acquisition of Australia and New Zealand Banking Group’s (ANZ) four aligned groups: RI Advice, Millennium3, Financial Services Partners (FSP) and Elders Financial Planners, known together as ANZ Wealth Management (ANZWM).

The addition of the acquired companies made IOOF the second-largest player in the sector by financial planner numbers as the transaction represented the intake of close to 650 new planners. As a result, IOOF saw a year-on-year increase in its total number of planners to 1,600 planners across all its groups from less than 940 a year ago.

This was in line with plans announced by the firm in 2018, according to which the $975 million acquisition which was first announced in October, 2017 was expected to enable the new owner to become the second-largest advice business by both adviser numbers and funds under advice.
At the same time, the move saw the overall number of financial planners operating under the auspices of ANZ to plummet from close to 900 advisers in 2018 to less than 200 in 2019.


While AMP and IOOF are still in the game, the post-Royal Commission environment saw increased movement from the banks which continued their exit by either announcing demergers, with a growing number of firms changing hands, or plans to close down some of their groups.

One of the most significant changes was the arrival of Viridian Advisory, a company which described itself as a self-licensed, national advice business offering wealth and retirement planning, and its acquisition of a significant element of Westpac’s BT Financial Advice business. Following this, in April Viridian confirmed that it was seeking to lure advisers from the aligned Securitor and Magnitude dealer groups with further “opportunity to keep the BTGL community together in an increasingly fractured industry.”

According to previous editions of Money Management TOP 100 Financial Planning Groups Survey and data from the Australian Securities and Investments Commission’s (ASIC) Financial Adviser Register (FAR), BT Advice had close to 550 planners in 2017 and slightly over 460 in 2018.
Earlier this year Westpac announced its exit from the financial advice business and further plans to reset its wealth strategy and, as a result of this, Westpac Banking

Corporation exited the provision of financial advice by Westpac salaried financial planners in June while authorised representatives currently authorised under the Securitor

Financial Group and Magnitude Group license will be expected to transition off those licenses by 30 September, the bank said.

However, this year’s Money Management survey showed that both groups, Securitor and Magnitude, posted substantial drops in terms of the financial planners. Securitor witnessed a drop from 293 planners a year ago to 113 this year while Magnitude saw a number of its planners to plummet from 171 in 2018 to 60 this year.

But Westpac was not the only bank which went through a complex de-merger process this year. In June, CBA announced the sale of one of its key wealth management assets, Count Financial to CountPlus for $2.5 million. As of last year, Count Financial had over 420 planners according to FAR.

Although the move did not come as a surprise since the bank had previously announced its intention to demerge its wealth management and mortgage brokering businesses, it is worth stressing that the transaction happened almost a decade after the Count business was first sold to the CBA by its founder, Barry Lambert, for a much higher consideration of $343 million.

Following this, the bank provided a further update in August regarding its aligned advice businesses confirming that it would ‘commence the assisted closure of Financial Wisdom’, a group with slightly over 330 planners according to the Money Management 2018 survey.

The bank said it intended to cease providing licensee services through Financial Wisdom by June, 2020 and will then proceed with an assisted closure. At the same time, advisers will be supported by CBA through an ‘orderly transition to alternative arrangements, including self-licensing or joining another licensee. The sale of Count Financial to CountPlus is expected to close in October. 

The decision to sell Count Financial to CountPlus followed the bank’s earlier exit from its remaining advice businesses as in response to changes to the regulatory environment for financial advice following the Royal Commission and structural changes in the advice sector.

As a result of these changes, CBA which had three main financial planning groups operating under its auspices (Commonwealth Financial Planning, Count Financial and Financial Wisdom) in 2018 with a combined number of financial planners of close to 1,300 saw this year the number to fall sharply to less than 500.

And the last of the Big Four, National Australia Bank (NAB) followed the suit with its biggest group, NAB Financial Planning shedding its number of planners to 276. By comparison in 2017 the group had 498 planners which translated into an overall drop of 45% within only two years. 

At the same time Godfrey Pembroke and Apogee Financial Planning both posted declines in total number of financial planners from 160 and 155, respectively in 2017 to 112 and 115 in 2019 while Meritum Financial Group saw a drop around 19% within the last two years.

GWM Adviser Services was no different from the rest of NAB-owned dealer groups and also reported a considerable drop in number of advisers from 467 a year ago to 396 this year.

According to Money Management’s survey, a combined 338 planners departed the aligned groups owned by NAB compared year-on-year.


The previous editions of the surveys showed that the mix of the top 10 largest groups has been pretty steady for a number of years and dominated by aligned groups owned by institutions. However, 2018 saw a pretty dramatic shift with a departure of one of the biggest independent groups, Dover Financial Planning which left around of 400 financial planners in limbo after ASIC announced a civil penalty action in the Federal Court against the company and its sole director, Terry McMaster.

This left Synchron, which currently has over 500 planners, as one of the largest independent groups in the TOP10 table last year.

At the same time, the fallout from the Royal Commission has seen BT Financial Advice and Financial Wisdom exit the ranking, making room for other mid-tier groups which successfully managed to entice advisers and move up in the ranking over the recent months.

One such examples is Merit Wealth, the group which is owned by Easton Wealth and which managed to grow its number of planners to 400, securing sixth place in the overall ranking.

Similarly, Bell Potter Securities with close to 350 planners on board and $46.8 billion in funds under management, moved up the ranking from last year and landed at number eight across the board.

On top of that, SMSF Advisers Network – a group owned by the National Tax and Accountants’ Association (NTAA) – which had a relatively small number of advisers only three years ago is currently one of the biggest groups across the ranking. In 2018, the firm reported that it had over 800 advisers, who were all accountants, and this year that number has further grown to almost 1,000 (991 as of July).


Although it was the banks and bigger institutional players who found themselves under the Royal Commission microscope and therefore generated the highest number planner departures,  there were still a number of smaller players which also signalled the changes in their wealth management exposure.

In April, Aon made a decision to exit the financial advice business and divest of its financial advice arm, Aon Hewitt Financial Advice, a group which had around 180 advisers on board in 2018. This decision was followed by the announcement that general manager, Jayson Walker, would be executing a management buy-out of the Aon-owned business. The firm said it reassessed its strategy back in 2017 and chose to focus more on its superannuation and investment product offering, as a result of its alliance with Equity Trustees.

In July, ASIC advised that Spectrum Wealth Advisers, which had 87 advisers as of 2018, had sought cancellation of its licence which would mean any remaining advisers will need to seek authorisation elsewhere. Although the company said it was voluntarily seeking to cancel its Australian Financial Services (AFS) licence due to the departure of some key responsible mangers, the regulator revealed that it had considered suspending Spectrum’ license before the company’s application was received.


Although no one knows for sure what the future holds for the industry and what the new advice business models will look like, one thing is certain – the rules have definitely changed and there is no way back.

Last month saw the industry struggling more than ever, with banks delivering on what they had announced months ago and ending their ‘great adventure into wealth management’ while leaving a high number of planners forced to look  for their new home, whether it will be with other licenses, through self-licensing model or by exiting the industry for good. 

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