Planners look to PAYG dealer group service model

Ownership of the client combined with dissatisfaction with costs have emerged as the key reasons why financial planners want to change their dealer group arrangements, according to a survey of more than 180 planners conducted by Money Management.

With around 54 per cent of respondents indicating they do not believe they receive value for money from their current dealer group arrangements, the strongly preferred alternative has emerged as self-licensing combined with arrangements under which they purchase dealer group services only as required.

Of those who indicated their dissatisfaction with current dealer group arrangements, 58 per cent said they would pursue a self-licensing model, with 30 per cent of those indicating that their preference would then be to purchase support services from either a dealer group or an aggregator of such services.

A number of respondents stated that their dealer groups were already allowing them a relationship under which they only paid for the services they used.

Interestingly, around 20 per cent of respondents suggested that industry groups such as the Financial Planning Association (FPA) or the Association of Financial Advisers (AFA) could act as the providers of the dealer group services required by their members.

A number of respondents noted that dealer groups were too compliance-focused at the expense of other services they might deliver to planners.