Will IOOF overtake AMP as largest licensee?

IOOF appears to have taken over AMP Group as the licensee with the largest number of advisers in Australia after it completed its acquisition of MLC Wealth on Monday.

IOOF chief advice officer, Darren Whereat, told Money Management that with the acquisition 406 advisers were brought from MLC to boost IOOF adviser numbers to around 1500.

This is higher than AMP’s 1,443, according to latest figures from Wealth Data (formerly known as HFS Consulting). Wealth Data’s figures as of 28 May, 2021, had IOOF had 1,111 advisers but this would increase with the acquisition.

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Whereat said the 406 authorised representatives accounted for 84% of the “targeted advisers” (around 483) with 77 advisers either moving to become self-licenced or had moved to another licensee.

“There were a number of advisers in the self-employed space and decided someone else was a better partner and we respect that decision – it’s been a long process and there have been some businesses that have made decisions as to what suits them best,” he said.

“We are fortunate and happy with advisers that chose to partner with us. For those that decided to leave us – the door is always open should they want an institutional relationship.”

When asked about becoming the largest licensee, Whereat said they did not focus on the numbers.

“We want to continue to deliver to our advisers. While we’re very close to having that mantel of the largest we just want to be a good partner to those that have intrusted us to be their licensee,” he said.

“If we become the biggest then so be it but it’s not something we specifically focus on.”

“The challenges for us in the way we’re dealing with the with sheer number is that we have a clear strategy. We have our employed planners spread across three brands Shadforth, Bridges and MLC advice. Clearly they are including high net worth and operating the mass market so they are servicing different segments and have different solution.”

In the self-employed partnership and the traditional space they had M3, RI Advice, Consultum, Lonsdale, Financial Services Partners, and Bridges.

“For us it’s about managing each of those communities which have around 150 individuals and each have their own general manager.

“So, we’re not managing the sheer number but we’re managing small pockets of individual communities and brands. Only thing we don’t manage differently is our assurance and governance where we have one standard for everybody and that’s where we have oversight in the advice given. In our dealer to dealer space we have MLC connect and IOOF alliances.

“So, 1500 sounds like a big number but when we break it down to individual community and brands with their own leaders that’s a better way to do it.”

Whereat noted that MLC advice would go under the Bridges Australian financial services licence (AFSL) and maintain its general manager and identity.

Godfrey Pembroke would have its own community and AFSL, and TenFifty would operate under a consultant AFSL.

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This takes me back to the early 90s. Who's number1, AMP or National Mutual? To answer that question nearly bankrupted them both, and now here we go again. I'll sit back and wait for IOOF to become a bank and ready myself for the next RC circus. IOOF now owns product and distribution. Thanks Hayne, we'll keep struggling over in independent land.

If we get the chance to individually licence directly with the government, a big if of course, how long will these big dealerships last? They will just be there to cover peoples professional years maybe at best. These guys have a lot to lose if we can cut them out of the equation, but of we could and work out some standard pi that all advisers signed up to in bulk to cover off that issue, well that would be a lot better than this situation where we pay a lot of fees for just compliance, or the marketing departments we never use. Talk about fee for no service from the dealerships. We are trapped at the moment.

Why are you trapped? Why not get your own licence? Some costs may be higher, particularly PI. But those cost increases are more than offset by an absence of dealer fees. It also allows you to streamline your process to something much simpler, that is tailored to your business only, and is not weighed down by dealer group compliance bloat. All services provided by dealer groups can be purchased directly from specialist providers, and you can pick and choose only the ones you need.

I havent got the time or inclination to run my own licence, I have researched it and decided I simply couldn't do it. Three of us were going to set one up, by the time you employ a rm and all the other costs, you have to outsource this and that, find pi, plus the stress , its not worth it, in my opinion. There has to be a simpler way.

I am in a similar position where the double set of red tape, the law, and then dealer group on top is making it near on impossible to deliver timely advice. how am I meant to comply with, "provide financial services efficiently, fairly and honestly" when i have no control over efficiency.

ASIC then comes out and says we are disappointed no one used the RoA. how can we, it's incompatible with the FASEA code.

how is it possible for barristers, accountants, and lawyers to practice but it's impossible for us?

the law really needs to be simplified because advisers are leaving in droves because they cannot cope.

the sad fact is that the most honest and ethical advisers who continue to remain to service clients are so stressed out and on the verge of quitting.

if the law is so poorly designed that honest hardworking advisers who are supporting clients through what is a 1 in a 100-year pandemic are quitting then there is something wrong. but no one is listening.

every week 100 advisers drop off and by the end of this year, we will have another 5,000 drops off.

the FPA has tested it, the mental stress advisers are facing is much more significant than any other profession why?

this situation is morally decrepit. I am already fasea education and test qualified and after 21 years have had enough and looking to exit.

Why would you need to employ an RM? Most qualified advisers can easily fill the RM role in a small licensee. Why would you do it in combination with two others? If you need collegiality share an office, if you need backup support employ a junior. Sounds like you may be over complicating it.

I wish we would get away from this sales agent/distribution who's the biggest rhetoric.
It is not the image we should be projecting to the public.
What would be more of interest is how many are Fasea qualified, how many are have masters etc, what is the splits of membership with FPA/AFA accounting/SMSF etc

Who cares? This is not the stuff that keeps advisers awake at night over.

What rubbish from Whereat! "We want to deliver to our advisers" Ha, more like dictate and control! Hence why they recently removed their self employed franchise structured advisers within Bridges to an employee arrangement so they can control them going forward to recommend their own products, which they couldn't do when they where under the self employed Franchise structure. I'm shocked how ASIC allow this. It's just replacing one bad egg with another! Give it a few years and the industry will be hit again however lead by IOOF this time not AMP and once again it will affect the individual advisers financially, not the big licensees that continue to steam roll the small business's

All advisers should be either self licensed, or employed advisers. The concept of self employed advisers operating under another company's licence is unsustainable. It is too difficult for any licensee to properly monitor and supervise advisers that aren't employees. It has been tried for 20 years and has failed. Advisers who think they can continue to have all the freedom of self employment, while someone else takes care of the regulatory responsibilities, are living in fantasy land. If you want freedom, get your own licence. If you can't be arsed to do that, then accept the constraints that come with being an employee.

Licensees promoting inhouse products is a different problem which needs to be dealt with by complete separation between advice and product companies.

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