New entrants suffer growing pains
Australia’s recently listed financial services companies are awash in a sea of red ink with a number of groups recording massive losses for the half year to December 31.
Integratec's parent Worldschool, integrated financial services group InvestorWeb and consolidators Stockford, Deakin and Harts have all recorded losses for the half year ranging from $450,000 to $21 million.
The Internet collapse and larger than expected integration costs are being blamed for the bottom line blowouts.
Worldschool recorded the biggest loss of $21.4 million on the back of $1.6 million revenue. Most of the loss is attributed to its online secondary school education business which was sold to the government a few months ago. The Integratec training and compliance business is performing well, accordfing to general manager John Prowse.
Deakin Financial Services suffered an $8.8 million loss from $5.6 million revenue largely due to a cost blowout on the integration of some of their financial services arms. News of the loss comes as the group's board undergoes a major restructure including the replacement of three directors and the stepping down of managing director Garry Crole.
Accounting and financial planning group consolidator Harts Securities suffered from problems associated with its property arm which lead to a loss of $8.15 million on revenue of $15.25 million.
However, not all listed financial services groups are doing it tough. Count, Fiducian and Beacon have all recorded healthy bottom lines for the six months to December 31.
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A quarter of advisers who commenced on the FAR within the last two years have already switched licensees or practices, adding validity to practice owners’ professional year (PY) concerns.
Integrated wealth and financial services group Rethink has launched a financial planning arm called Rethink Wealth to expand beyond property investing and into holistic wealth management.
While adviser numbers continue to slowly creep back up, the latest Wealth Data analysis reveals they would actually be in the green for the calendar year if it weren’t for so many losses in the limited advice space.
Iress has appointed a chief AI officer to spearhead the fintech’s strategic focus on AI, with chief executive Marcus Price describing how the technology opens the doors to a “new frontier for wealth advice”.
