Commonwealth restructures its dealer groups
The CommonwealthBank has given Colonial Financial Services and Financial Wisdom planners the opportunity to choose which dealer group they want to operate under as part of a wide-scale restructure of its two commission based dealerships.
And the bank has announced plans to rename Colonial Financial Services to Commonwealth Financial Solutions under the restructure designed to further integrate the two dealer groups that the Commonwealth acquired with its purchase of the Colonial group in 2000.
Under the new arrangement, the management structure, support services — including technology, marketing and research support — and recommended product lists of both dealer groups will be standardised for the first time.
Under the Colonial group, Financial Wisdom had been positioned as the premium dealer group, offering a more extensive range of products and services than Colonial Financial Services.
According to data fromMoney Management’sTop 100 dealer group survey, Financial Wisdom lost up to 60 planners in the year directly following the Commonwealth’s acquisition of Colonial.
At the time, it was understood at least some planners departed because they felt their premium status would be diminished under the Commonwealth.
The Commonwealth’s general manager of dealerships, Jerome Bleijie, says there is no indication the restructure would prompt an exodus of Financial Wisdom planners from the Commonwealth group.
He says a core of planners from both Financial Wisdom and Commonwealth Financial Services will stay with their respective groups, although some would switch their allegiances across the two dealerships.
“Internal research that we have conducted has indicated there will be a core in both groups who won’t want to change, but we should have a clearer picture of what advisers have chosen in a few months,” Bleijie says.
He says the Commonwealth, which has some 500 planners spread evenly across the two dealer groups, has urged planners to make a choice about which dealer groups they continue with within six weeks.
The restructure of the dealer groups will be accompanied by a new business valuation package for both sets of advisers.
Under the package, advisers will be able to have their business valued at up to four times their qualifying income, a figure based on their revenue contribution to the group.
Bleijie says the new valuation multiple is one of the strongest available in the market.
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