Value trumps cheque-book recruiting
Dealer group Futuro lost three practices to a major institution offering sign-on payments in the last 18 months, but those practices soon regretted their decision, according to managing director Dennis Bashford.
One practice paid a six-figure amount in order to come back to Futuro, said Bashford, who was participating in a panel discussion at the AFA National Conference on the Gold Coast.
"The other two had already spent their money and haven't been able to raise the finance to get out of it," he said.
While sign-on fees could be alluring, the value dealer groups offer is starting to be more appreciated, Bashford added.
"I don't think there is any one particular option that is going to suit everybody and I think every option is going to be a compromise," he said.
"But I think people need to really look very closely at what they want."
The panel, chaired by Pinnacle Practice founder Anne Fuchs, discussed the benefits of owning an Australian Financial Services Licence versus being aligned to a dealer group.
Chief executive officer of Associated Advisory Practices — which provided services to AFSLs — Soula Cargakis said some of her clients would have been better off in a dealer group.
"I look at some of our clients who have their own AFSL and they would be better off in a dealer group in terms of the monitoring and supervision of their authorised representatives," Cargakis said.
"It's not necessarily the smaller ones. In some instances, it's the bigger ones, but they're not [monitoring and supervising their authorised representatives] and they think they can outsource that to us. That's not our job," she said.
"They have to monitor and supervise their reps because if ASIC [the Australian Securities and Investments Commission] comes in they're going to come and speak to them and not us."
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