Sequoia’s adviser network grows amid fallen results

Sequoia Financial Group’s licensee services business was a “standout” despite weaker results in FY23, says CEO Garry Crole, with attracting existing advisers a key focus in this financial year.

In its FY23 results last week, the firm announced a 55.6 per cent drop in EBITDA to $5.5 million from $12.4 million in FY22. Revenue also took a 10.7 per cent loss to $131.5 million, down from $147.3 million the previous year. 

Weaker equity market conditions and non-recurring expenses were cited as key reasons for both of the lower figures.

In a subsequent webinar, Garry Crole, chief executive and managing director at Sequoia, said  he was confident that Sequoia’s revenue would see a 20–25 per cent jump this financial year compared to FY23, not including growth from future acquisitions.

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“We expect our [EBITDA] to normalise and get back towards a conservative $10 million operating profit in 2023,” he said.

“The shake-up of the FY23 results have been good for the company in respect to a wake up call. We can now continue to grow long-term revenue and deliver the type of returns we want.”

Across the firm’s four operating divisions, the licensee services business saw a 5 per cent increase in its adviser network in FY23 despite a 43 per cent reduction in the size of the industry across the last five years.

“Licensee services are a standout so far for July and August [FY24], we are very pleased,” he added.

With dealer group Libertas Financial Planning, which was acquired by Sequoia in August 2019, in the process of liquidation, advisers were offered the opportunity to join InterPrac Financial Planning or Sequoia Wealth Management, or look to join an alternative licensee altogether. 

“Despite that decision, most of those Libertas advisers did join one of our licences,” Crole noted.

The decision to consolidate AFS licences aimed “to achieve operational and cost synergies” amid a “year of transition”. 

According to the ASIC FAR, Sequoia Financial Group has gained the most advisers for licensee owners this calendar year from 1 January, sitting at net 20 advisers. 

However, figures from Wealth Data revealed the group had seen a net change of -38 between 1 July 2021 and 30 June 2023, with 107 appointments and 145 resignations.

During this time period, only two licensee groups, Centrepoint Alliance and Lifespan Financial Planning, saw a net positive change in adviser numbers.

Sequoia’s chief executive observed a growing number of enquiries from advisers looking to join their licensees. While the firm is open to licensee mergers in FY24, organic growth is more of a focus looking ahead.

“We are looking to offer those looking to exit a licence an opportunity to join our existing licences.”

“The market can see by Insignia’s decision to close some licences and consolidate, that’s a better strategy, and we are following that strategy.”

Sequoia has downsized from 150 employees to 100 and enhanced its leadership team by recently appointing Martin Morris, former chief distribution officer and director at Praemium for seven years, as its chief operating officer in August.