Dealer group competition to attract advice practices heats up
As dealer groups compete to attract planning firms to their bands, publicly-listed Centrepoint Alliance has urged them to look at long-term viability rather than reacting to short-term incentives.
Centrepoint’s urging comes at the same time as a fuller picture is expected to emerge this week of the number of MLC aligned advice practices which are opting to move under IOOF licenses following the company’s recent acquisition of the MLC Wealth business.
Centrepoint Alliance group executive, advice, Paul Cullen said the disruption which had occurred in the financial advice industry in recent years had increased interest in mid-tier dealer groups offering both licensing and self-licensing options, but funding the right licensee required close scrutiny.
He said that scrutiny needed to include proving how licensees were adapting to the changing regulatory environment.
“With grandfathered commissions ceasing from 1 January 2021, advisers need to ensure licensees have the necessary scale and structure in place to manage the transition to new revenue models or they risk significant fee increases,” Cullen said.
“Advisers are now more focused on what they get for their money and are looking to align with a provider that has both financial strength and longevity. Advice technology, approved product lists, business support and access to the right training opportunities are also critical areas of focus
“This is not only being driven by the advisers but also by their clients, who have become increasingly savvy and want reassurance the licensee is reputable,” Cullen said.
He acknowledged that the IOOF acquisition of the MLC Wealth business was a factor in generating adviser movements together with AMP’s comprehensive review of its business.
“We are seeing a second wave of movements as advice firms either review their initial decision or take first steps towards finding a new licensee to call home,” Cullen said.
Recommended for you
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
In the run-up to heavy losses expected at the end of the financial year, June has already reported consecutive weeks of adviser losses.
ASIC has banned a former NSW adviser from providing advice for 10 years for investing at least $14.8 million into a cryptocurrency-based scam.
ASIC has sent warning notices to social media finfluencers who it suspects are providing unlicensed financial advice to Australians as part of a global crackdown by international regulators.
