NextGen adviser numbers plummet

Wealth Data Colin Williams nextgen adviser movement adviser numbers

11 September 2023
| By Jasmine Siljic |
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NextGen Financial Group’s current adviser numbers sit at just 20 compared to a peak of 123 in 2019.

Research firm Wealth Data revealed a loss of 13 advisers for the licensee owner in the past week to 7 September. NextGen had additionally lost 10 advisers the week prior.

The licensee had 75 advisers at the start of 2022, then began 2023 with 46 advisers, Wealth Data founder Colin Williams observed.

“The growth for many licensees this week was dominated by appointing advisers from the licensee NextGen,” he said.

All but two of NextGen’s 13 losses last week were appointed elsewhere. Six of their advisers joined LFG Financial Services, alongside five who were appointed at Australian Mortgage and Financial Advisers (AMFA).

In July,  NextGen Financial Group was ordered by the Federal Court to pay an SMSF trustee $270,000 over an unpaid AFCA determination regarding inappropriate financial advice.

In August 2016, WJ & V Drakoulis Super Pty Ltd (as trustee for the WJ & V Drakoulis Super Fund) received personal advice to establish an SMSF to purchase a residential investment property. However, there was a delay in settlement of the investment property.

In the interim, the $175,000 that had been put aside for the property purchase was invested into Fund I for a one-year term, which meant the property purchase was unable to be completed.

The trustee then complained to the Australian Financial Complaints Authority (AFCA) that they received inappropriate advice to invest in Fund I. In November 2022, AFCA determined NextGen should pay $261,394.90 compensation and provide a transfer of its units in Fund I.

Tracing back to its foundation in 1985, NextGen has undergone numerous ownership changes. 

It was formerly owned by Beacon, a subsidiary of Linchpin Capital led by Peter Daly. 

Linchpin collapsed in 2018 and Daly was banned in November 2019 from providing financial services for five years, alongside former directors Paul Raftery and Ian Williams, for failing to act in the best interest of investors in managed investment schemes under their control.

In June 2020, it was acquired by US private equity firm Genesis Financial, a global financial services company focused on fintech-powered wealth management and D2C lending platforms.

Overall, Williams noted the week has been "volatile" and extremely busy with movements. Some 115 advisers were active with appointments or resignations, resulting in a net change of +1.

The current number of advisers stands at 15,701. This calendar YTD has seen a net change of -98 and a net change of +135 for the financial YTD.

Four new licensees opened up while one ceased. Moreover, six new entrants joined the industry.

Looking at other losses, 37 licensee owners had net declines of 65 advisers. 

AMP Group was down by five advisers with the majority moving to PSK. Mercer also lost five advisers, however none have shown to be appointed elsewhere. Some four advisers left KDM Financial, with all being appointed at Australia National Investment Group.

PictureWealth saw a loss of three, wherein two advisers joined a smaller licensee and the third moved to InterPrac. 

Three licensees were down by two each, including AAN Wealth, and 29 owners saw a net loss of one adviser including Centrepoint, Guideway, Macquarie Group and Viridian.

In terms of growth for the week, 39 licensee owners had net gains of 63 advisers.

Australia National Investment Group was up by five advisers, including four from KDM Financial and one from PictureWealth Group (Insight Investment Services). Sequoia Group welcomed three advisers at InterPrac, with all three joining from different licensees. 

Nine licensees were up by two, which included Templestone Financial, NTAA and Castleguard Trust (Lifespan). Two new licensees also commenced with two advisers each, and 26 licensee owners increased by one adviser each.

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