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.
Recommended for you
Licensee Centrepoint Alliance has completed the acquisition of Brighter Super’s annual review service advice book, via Financial Advice Matters.
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
