Looking over the past five financial years, which licensees have demonstrated consistent long-term share price growth?
Over the last five years to 2 July 2024, Money Management examined the share price of the major ASX-listed advice licensees: AMP, Centrepoint Alliance, Count, Fiducian, Insignia, Sequoia and WT Financial.
This is a longer-term track record than the one-year look earlier this year which found Centrepoint Alliance and Fiducian were the only two licensees to have demonstrated positive growth over one year to 31 May.
The top-performing advice licensee over the five-year period is Sequoia Financial Group, which floated on the ASX 200, and has returned 170 per cent.
Led by chief executive Garry Crole, the firm’s share price has been helped by M&A activity and the firm is targeting 500 advisers within InterPrac and Sequoia Wealth Management by 2026. This will be achieved by acquiring adviser licensing services from subscale AFSL providers with less than 100 advisers.
As a benchmark, the ASX 200 has returned 14.6 per cent over the same period.
Following Sequoia in second place is WT Financial which has returned 160 per cent, and Centrepoint Alliance which has returned 140 per cent in third place. A smaller gain of 41 per cent has been recorded by Fiducian.
Both WT and Centrepoint Alliance have also been active in the M&A space over the period in question, with WT acquiring Synchron, Sentry and Millennium3, and Centrepoint Alliance acquiring Financial Advice Matters.
On the other end of the spectrum, Insignia lost 55 per cent, AMP lost 49 per cent, and Count lost 40 per cent.
Insignia has suffered in recent years but recently appointed a new chief executive Scott Hartley to replace Renato Mota, who is embarking on a three-year turnaround strategy of four pillars:
- Deepening partnerships with advisers and employers.
- Simplifying the business.
- Building a safe and trusted business together.
- Improving clients’ financial wellbeing.
Last July, the firm announced it would introduce Rhombus Advisory, a partnership ownership model for self-employed licensees comprising RI Advice, Consultum Financial Advisers and TenFifty. Insignia will hold a majority stake in the group which will reduce over time as advisers receive equity; the decision has been welcomed by Morningstar as a way to stem adviser losses.
| Licensee | 5-year share price growth |
| Sequoia | 170% |
| WT Financial | 160% |
| Centrepoint Alliance | 140% |
| Fiducian | 41% |
| Count | – 40% |
| AMP | – 49% |
| Insignia | – 55% |
Commenting on the success of Sequoia, Crole told Money Management that the share price growth could be attributed to the multiple revenue-generating aspects of the business.
“For the last five years since the board set the businesses longer-term goals that the board, our senior management including CFO, CEO, most of the non-executive directors, our head of HR, and head of business units all still remain with the group.
“In addition, the fact we have multiple service offerings, so we can generate revenue from multiple functions rather than just simply taking a piece of the advisers’ income to deliver a return for shareholders, is critical.
“The service provision to offer accountants, financial planners, other AFSL holders and high-net-worth consumers a wide range of offerings has allowed us to acquire scale in multiple parts of our business at realistic prices to create a return that is reasonable for the cost of capital.”
He concluded that the company has also been helped by a consistent stream of advisers opting to remain at the licensee while others are seeing their advisers exit.
