Impetus swings to mid sized dealers

While the big dealer groups are getting bigger, boutique groups seem to be winning the high net-worth clients, according to this year’sMoney ManagementTop 100 dealer’s survey.

Rainmaker managing director Chris Page says the boutique groups seem to be nibbling away at the edges of the large dealer businesses.

“It would seem planners start their careers with the big dealer groups and, after a couple of years, go and form their own business,” he says.

According to the Top 100, 81 per cent of all planners work for the top 30 groups. In the past 12 months 848 planners moved into these smaller groups.

The number of planners employed in the top 10 dealer groups has risen in the past 12 months to 6,786, compared to 5,851 in the previous year.

One interesting area the data throws up is how much funds under administration each planner achieves within their group.

The figures show planners in the larger groups handle smaller sums than their counterparts in the medium to small-sized firms.

In the larger groups, PIS planners look after $4 million each on average while at Count this rises to $5 million per adviser, although at National Financial Planning the figure is $28 million.

In the medium groups, planners seem to look after much more money per client. At Ipac Securities the planners look after $160 million on average (the top performer of funds under advice per planner) while at Perpetual Private Clients it is $57 million per planner.

In the small dealer groups, it is hard to work out figures due to the lack of data supplied by the firms. However, Wilson Dilworth advisers look after $83 million each on average, while Gannon Growden Schonell advisers, who narrowly missed out on a ranking at 103, still managed $68 million per client. Gannon was at number 100 in our main rankings but third in the funds under advice per adviser table.

The number of clients each adviser looks after varies dramatically, even within the group categories.

At PIS each planner looks after 58 clients on average, however, Westpac advisers look after 682 clients.

The higher figures for the banks might be explained by the simple advice they give to some clients. In some banks, advisers deal with everything from credit card applications to full financial plans, hence the large throughput of clients during the course of a year.

Ranked according to the amount of funds under advice, the top 10 list changes quite dramatically, with National coming out top and Retireinvest coming second. The list is made up of the traditional, well-established groups such as Godfrey Pembroke and Count.

However, when looking at the funds under administration per client, the boutique managers are well-ahead of the larger groups.

Top of this list is JP Morgan, with $1 million of funds under advice per client, yet they are ranked 96 in the main table, which is based on the number of advisers.

Tynan Mackenzie is towards the bottom of the list, but has nearly $670,000 of funds under administration per client.

The highest-ranked top 10 group is PIS, which has $64,615 of funds under advice per client.

Rainmaker’s Page says these figures prove that the boutique groups are thriving.

“When you look at the funds under advice figures, you see the big groups don’t feature as much. The boutiques are taking the high net-worth individuals,” he says.

“The bigger groups seem to go for volume, while the high-net-worth clients are obviously profitable, which is perhaps why they are attracted by the smaller groups.”

Page says this year’s Top 100 survey shows the financial planning industry is in a healthy position.

“The financial planning industry is getting bigger, with some groups taking bigger market shares, but there is definitely room for the boutique groups within the industry,” he says.