Centrepoint’s Shuttleworth on the ‘lucrative’ adviser market
Centrepoint Alliance foresees a “lucrative recruitment market” in the advice space in the next 12–18 months.
In its FY24 results on 22 August, the firm announced net profit after tax was $7.8 million, an increase of $1.5 million on the previous year, while net revenue increased to $36.1 million.
Speaking on a shareholder webinar, chief executive John Shuttleworth provided further information on how the licensee hopes to benefit from licensee switching.
It has 549 advisers who are licensed with them and 825 advisers who have used the firm for self-licensed solutions. This currently positions the licensee as Australia’s fourth largest licensee but will rise to third following the divestment by AMP of its advice division to Entireti at the end of the year.
It flagged in its results that it was in the minority among licensees in having been able to successfully recruit and retain new advisers, with an increase of 38 authorised representatives during the financial year.
“We think we are really well placed with the acquisitions going on and the disruption in the market,” he said. “We think it will be a lucrative recruitment market for the next 12–18 months and we are very focused on growing.
“When people switch, they either find another licensee or they decide to go self-licensed, and we are uniquely positioned in that we have a strong business in both.
“We are well placed in the market and the disruption should provide a tailwind for further recruitment.”
Speaking to Money Management in May, Shuttleworth described how the licensee wants to be the “stable licensee in a sea of turmoil” while other licensees are pursuing M&A strategies.
“This disruption creates market opportunities for us. For example, when two firms merge there are advisers who hold off joining it until there is stability. You need that recruitment to offset natural attrition so you can be in a position for losing advisers for 12–18 months.
“We say we want to be seen as the stable licensee in a sea of turmoil, people want to have that stability and trust from their licensee.”
Outside of organic growth, he told shareholders that the firm is looking to grow from further acquisitions and book buys which it described as “highly attractive”, having completed the acquisition of Queensland advice firm Financial Advice Matters (FAM) in December 2023.
The acquisition meant Centrepoint’s salaried advisers rose from four to 19, and the added scale allows FAM to further expand in new locations and partner with industry and superannuation funds to provide advice. In the seven months since the acquisition, Centrepoint said FAM had generated revenue of $3.57 million.
“Due to industry consolidation, we are very focused on accelerating growth of higher margin salaried advice businesses through further acquisition,” Shuttleworth said.
Platform potential
Moving onto its platform, which is expected to launch an investment version this October in partnership with FNZ followed by a superannuation platform, Shuttleworth said the platform market is $1.1 trillion in size.
He added that the major institutional players in Insignia, BT and AMP are losing market share in favour of players like HUB24 and Netwealth.
“We estimate we have $69 billion under advice and we’ve got a large network of 1,374 advisers. A 1 per cent penetration of our advice network would give us close to $700 million in funds under advice, but a 1 per cent share of the platform market would allow us to start building a meaningful platform business if we’re successful.
“The premise that all flows go to the big incumbents is not the case, and we see that as a big opportunity.”
AUTHOR
Laura Dew
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