Dover caves in to fee pressures
Low-cost dealer group Dover Group, which reputedly offers the lowest member fees in the planning sector at $670 per month, is set to raise its fees to a “more sustainable level”.
Founder and director Terry McMaster said its current one-size-fits-all fee will have to go up, probably as high as $20,000 per year over the next two years, as “continuing to run at $8,040 a year is no longer sustainable”.
McMaster said the three-year-old Melbourne-based group, which has 70 authorised reps nationwide, was unable to maintain an adequate level of service for reps at the current fee level.
“As you get bigger the cost structure expands accordingly, and then you have to put on more staff, all of which makes it very difficult to get the rate of return typical of the industry in the low-cost sector."
He added that he did not know how the authorised representatives would react to being told of the pending fee rises and also to “some possible stripping of (mainly technical) services”.
“We will have to talk to our planner members carefully about it, as they too are currently feeling the crunch because their commissions (all of which Dover representatives keep) are lower.
“It’s not been a complete loss of profitability, as they’re still generally cash flow positive, but it's not the rate of returns that they have come to expect," he said.
AUTHOR
Recommended for you
With Fortnum Private Wealth and Professional Financial Services now unified under the Entireti umbrella company, CEO Neil Younger has detailed to Money Management the firm’s new direction and future expansion.
The FAAA has suggested looking offshore for overseas financial advisers to ease the adviser shortage, but are employers willing to take on the burden of workplace visas?
There may be a huge influx of alternatives coming to the market, but timing and access difficulties mean advisers can easily end up disappointed with their selection, according to Morningstar global CIO Dan Kemp.
An NSW individual has pleaded guilty to one criminal charge of providing unlicensed financial services after promoting crypto investments at national seminars.
