Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

Advisers facing costs pincer

financial-planning/

26 March 2019
| By Mike |
image
image image
expand image

Dealer groups have begun lifting the fees they charge advisers by as much as 30 per cent to cover off both increased costs and the loss of revenue they know will flow from some of the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Association of Financial Advisers (AFA) chief executive, Phil Kewin pointed to the increased dealer group adviser fees as yet another issue confronting members as they sought to deal with an end to grandfathered commissions and the costs associated with the new Financial Adviser Standards and Ethics Authority (FASEA) regime.

He said the increases were just adding to the cost burden being imposed on advisers.

Infocus Wealth Management managing director, Darren Steinhardt confirmed that his firm had increased its adviser fees by around 30 per cent, although the amount was variable depending upon the scale of an adviser’s business.

He said the increase reflected an increase in basic costs but acknowledged that it also reflected the reality of what would happen to platform fee rebates and sponsorships as a result of the Royal Commission.

Former dealer group chief executive, Paul Harding-Davis confirmed the scale of the adviser fee rises and the fact that they would be variable according to the scale of an adviser’s business.

The increase in dealer group fees has also been portrayed against the background of the almost certain removal of grandfathered commissions having fundamentally undermined business valuations.

Stories are circulating about advisers who purchased books of business 15 months ago for multiples of 3.7 times for life insurance clients and 2.5 times for fee-for-service clients having to settle for 2.5 times life and 1.5 times fees.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

2 weeks 6 days ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

3 weeks 6 days ago

So we are now underwriting criminal scams?...

7 months ago

After last month’s surprise hold, the Reserve Bank of Australia has announced its latest interest rate decision....

3 weeks 1 day ago

WT Financial’s Keith Cullen is eager for its Hubco initiative to see advice firms under its licence trade at multiples which are catching up to those UK and US financial ...

3 weeks 4 days ago

While the profession continues to see consolidation at the top, Adviser Ratings has compared the business models of Insignia and Entireti and how they are shaping the pro...

6 days 22 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND