Sequoia seeks acquisitions to ‘stem the bleeding’ in industry

Sequoia Financial Group is hopeful that it will be able to “stem the bleeding” in adviser numbers with acquisitions as licensee revenue rises 15.2%.

In an announcement to the Australian Securities Exchange (ASX) of its annual general meeting, the firm said net profit after tax (NPAT) was $5.7 million, up 3% from FY21 while revenue was $147.3, up 26.5% from FY21. EBITDA was $12.4 million, up 7.3% on the previous year.

In the licensee division, it said FY 2023 had seen an increase in retiring adviser practices providing opportunities for salaried planning businesses to acquire further client books.

Revenue in this division was up 15.2% from FY21 to $64 million and Sequoia said its FY23 forecast was for this to grow 5% year on year over FY22.

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The firm noted client remediation payments from a 2019 remediation matters against an adviser who had been terminated in 2019 had been settled for $2.5 million, an abnormal expense incurred by the licensee services division.

Sequoia said it expected to acquire bolt-on businesses in the licensee services space where it could gain a scale benefit and increase the number of advisers to whom it provided a licensee service.

Chairman, John Larsen, said: “For the first time in many years, Stephen Jones, the newly-appointed Financial Services Minister, recognises the importance of a strong advice community, and early indicators have us optimistic that we can ‘stem the bleeding’ in terms of adviser numbers.

“The need and rise in demand for advice has never been greater. We have therefore continued to increase the range of services available to our various customer segments so that we help drive that turnaround in adviser numbers, which has seen 10,000 advisers depart the industry nationally since 2018.

“In the short term, acquisitions and organic growth remain equally important whilst reaching ‘scale’ in the services we provide remains our core focus.”