Centrepoint to offer licensing service to institutional planners
Centrepoint Alliance will offer planners outside its own network the ability to gain their own licence while also offering guaranteed renewability on professional indemnity (PI) insurance for advisers operating under its licence and dealer services.
The plans are in response to a concentration of advisers at the institutional level, where Centrepoint Alliance managing director John de Zwart said there was no positive value proposition and growth was by acquisition and inorganic.
The Australian Financial Services Licence (AFSL) solution would be offered through Associated Advisory Practices (AAP) to any planner who wished to gain their own non-aligned AFSL, with de Zwart stating the cost to assist planners in moving from an institution would be around $30,000.
This fee would involve helping a planner gain their own AFSL, secure professional indemnity insurance and the provisions of dealer group services for a period of 12 months.
De Zwart said the service was not a recruitment drive but a response to the ongoing concentration of advice at the institutional level.
“Institutions are not acquiring financial planners with a positive value proposition. In the lead-up to the Future of Financial Advice (FOFA) reforms they attracted planners with news of woe but they cannot offer the proposition of 'independence of mind’.
“They can offer cheques to attract planners but their growth has been inorganic and when it comes to building customer and adviser value propositions they have demonstrated they do not do that well. They cannot grow without offering cash.”
De Zwart said the offering of guaranteed renewability on PI insurance followed a number of years of significant price increases as well as the “onerous process in which planners were usually offered new terms within days of expiry and forced into accepting them”.
Under the service, which will be restricted to planners with Professional Investment Services (PIS) and AAP, insurance data would be stored each year to generate renewal notices six weeks before expiry.
In the event there has been no significant change in that time, advisers would be offered guaranteed renewability, while those with changes in their practice would be offered new terms within a week of notification of the changes.
According to de Zwart the PI solution will launch at the end of March after the completion of an interim program in which all practices so far have received renewals on better terms than their previous PI cover.
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