Phillip Capital ditches retail advice

2 June 2020

Phillip Capital Limited has announced it will stop providing advice to its retail clients across Australia due to the declining trend of the retail advisory model and a high cost location compared to other regions, following Monday’s  sale and purchase agreement with Sequoia Wealth Management. 

Instead, the group said that more pressure being put on advisers and licensees helped create new opportunities for the group which was now planning to focus on expanding its wholesale services division with the help of its suite of trading solutions. 

“Our objective is to become the default outbound counterparty for Australian licensees accessing global markets. We will continue to focus on integrating with various business partners and vendors throughout 2020 whilst we on board key clients,” PCL’s chief executive, John Miles, said. 

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“Our fully integrated solution for licensees makes trading international markets as easy as trading local shares via desktops advisers are currently using. We are very encouraged by the demand we are seeing from self-clearers and Australian Securities Exchange [ASX] trading members looking for an International only solution and Australian financial services licences [AFSLs] looking for a combined Australian and international solution that is easy and cost effective”. 

Sequoia Wealth Management said in its announcement made to the ASX that following its arrangement with PCL it expected the firm’s customer base would add approximately 5,500 equity accounts to Sequoia’s executive and clearing business, Morrison Securities, and see an increase of around $1 billion in funds under advice adding $4 million of gross revenue. 

Phillip Capital said it developed one of the most integrated trading solutions in Australia for financial services licensees seeking access to trade Australian and international markets for their clients in one account and using proprietary technology Phillip Capital announced key integrations with Refinitiv and Iress during 2019 and were currently onboarding a number of major new clients including Morrisons and FinClear. 

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A few Groups are preparing to move to wholesale only.
Do their Advisers still need to be licensed and on the FAR? I would think so.
This could get interesting.

All superannuation advice is deemed to be retail, unless it is an SMSF trustee which may be wholesale. So to go down this path they would also need to avoid any superannuation product advice.

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