IOOF Group has lost 414 advisers since the start of the year, posting one of the heaviest adviser losses among the largest groups, and has seen its adviser number operating under its umbrella drop to 1,400 at the end of September.
According to Wealth Data, when IOOF announced its acquisition of MLC in August, 2020, it highlighted a combined group of 1,884 advisers.
IOOF was followed by AMP Group and National Tax and Accountants Association (NTAA) which posted a loss of 279 and 181 advisers, respectively, at the end of Q3.
The total number of current advisers dropped further this week to 18,932, after 47 new appointments and 80 resignations were registered.
Source: Wealth Data
Further to that, 24 licensee owners posted net gains for 30 advisers and 32 licensee owners posted net losses of 65 advisers.
According to Wealth Data, after deducting the three new provisional advisers, the net losses of experienced advisers amounted to 36 this week, continuing the earlier trends with 43 losses last week and 37 losses two weeks ago.
As far as the biggest losses this week were concerned, New Zealand-based group, Craigs Investment Partners, saw a departure of 14 advisers who were not elsewhere appointed.
At the same time, WT Financial Group saw a departure of five advisers as Wealth Connection had moved from Sentry Advice, currently owned by WT Financial Group, to Infocus.
Sources: Wealth Data
Comments
Ioof are struggling with the acquisition of MLC. They had expected many more advisers to come across and stay to ensure it was commercially viable. Now they are going through restructures and will need to have further significant restructures over the next few months to ensure they are saving the $150m in synergy costs over the next 3 years. Advisers don’t seem to be interested in joining the group and Ioof don’t seem interested in growth either because they don’t have capacity to bring advisers on board.
I would suggest that a large part of the exodus is due to the steep increase in their licensee fees, making them one of the more expensive offerings in the market.
There is no future for self employed advisers operating under someone else's licence. Costs and complexity will continue to increase regardless of dealer group, because the "Authorised Representative" model, which is really just a hangover from the old tied agent days, is unsustainable.
All self employed advisers should be getting their own licence or getting a job with someone who has.
Why would an adviser stay or move to IOOF? They have made it almost impossible to run a business profitably with over the top compliance for compliance sake requirements that adds no value to clients, but has added to the cost to serve considerably.
Their fees for self employed advisers increased materially today, at a time satisfaction with the organisation is at an all time low. Internal moral is also poor. Why wouldn't it be? They see incompetence and poor leadership being rewarded!
Are they still applying a % on revenue over and above the base fee. My sums told me the base fee would like like around 50-60K + XPLan COSTS+ 3% on revenue, very expensive
If MM didn't sensor my comment above, the last paragraph would make a lot more sense. Thanks Comrades!
IOOF had a clear-out earlier this year, cutting practices that it considered too risky or unviable. Affected practices had as little as 30 days to find a new licensee with little or no explanation about why they were cast adrift.
Welcome to Dover part 2 but in this case its the licensee not asic playing hard ball. The licensee structure is a joke.
The only people who believe the 'advice' narrative at IOOF are the senior staff and board. Average group, leadership, too much acquisition risk and poor performance.
IOOF don't understand that they are vertically integrated. At least not when Practice Development Managers (PDMS) are referred to internally to Advisers as "Your Supervisor." They struggle to understand that the Adviser controls the advice and relationship with clients. They are the industry's biggest dinosaur.
Authorised Representative advisers struggle to understand that the licensee (IOOF in this case) is legally responsible for the advice given, even though as you say, the Adviser controls the advice and relationship with clients.
This is why PDMs are in effect supervisors. It is why licensees have layers and layers of overbearing compliance that go way beyond the requirements of the law. It is why AR contracts are totally biased in the the licensee's favour, and allow them to cut you off at the knees if the relationship sours. It is why the whole AR based licensing model is totally unsustainable, and should have been one of the first things dozy Hayne got rid of.
Add new comment