Insignia develops partnership ownership model for advisers

insignia financial advice licensees Shadforth bridges financial services renato mota

27 July 2023
| By Laura Dew |
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Insignia has announced its intention to reset its financial advice operating model by launching a partnership ownership model.

In its financial results today for the three months to 30 June 2023, the firm said a new business is being developed under the working name of Advice Services Co (ASC). 

This will have a strong mandate to grow advice practices and advisers operating under its licences as Insignia seeks to become Australia’s largest adviser-owned licensee group.

ASC will be a partnership ownership model for self-employed licensees comprising RI Advice Group, Consultum Financial Advisers and TenFifty.

It will be headed up by current Insignia chief advice officer, Darren Whereat, as chief executive. Whereat was previously chief executive of RI Advice Group from 2013-2016.

The ASX statement explained: “ASC represents the ambition to create Australia’s largest adviser-owned licensee group, positioning it to capitalize on the dynamic self-employed advice market with the support of Insignia Financial. ASC will operate with independent management, oversight and governance with input from both Insignia Financial as well as key advice practice representatives”.

Insignia will initially hold a majority stake in ASC which will reduce over time as advisers receive equity in ASC. It will contribute staff, resources and working capital and continue to support the ASC business under a transitional services agreement for 12 months from completion. 

Completion is expected to take place in the coming months and Insignia expects ASC to be profitable after the initial 12-month establishment period.

Insignia will also provide a capped indemnity to the new entity for any historical remediation relating to conduct under Insignia Financial’s ownership.

Chief executive, Renato Mota, said: “This is a transformational initiative for our advice offering and will accelerate the return to profitability of our advice business, while ensuring our advice services model is positioned for growth as the financial advice industry continues to evolve.”

He added the development will also allow Insignia to focus on the growth of its professional services advice business and advice in superannuation.

“It also provides Insignia Financial with greater opportunity to focus on the growth of its professional services advice business, Shadforth Financial Group and Bridges Financial Services, expanding the scope of advice through superannuation and the development of new technology-enabled advice delivery to leverage future opportunities presented by the government’s response to the Quality of Advice Review.”

Separate to ASC, ownership of Godfrey Pembroke Group is expected to be returned to Godfrey Pembroke advisers with Insignia retaining a minority stake and it is in discussions around the sale of the Millenium3 licence. 

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