Count changes business model in response to FOFA
Count Financial will restructure its business model in response to the banning of volume related payments in the Government’s Future of Financial Advice reforms (FOFA).
Among the changes, the group will apply for a second Australian Financial Services Licence (AFSL) as it aims to become the investor-directed portfolio services (IDPS) operator for its strategic platform offerings, Count chief executive Andrew Gale (pictured) said.
The group will also apply to the Australian Prudential Regulation Authority (APRA) for a licence to become a registrable superannuation entity (RSE), also with regards to its strategic platform offerings, which will bring the group under the regulatory umbrella of APRA.
The group will await further detail on the grandfathering of platform contracts but would prefer not to use grandfathering with regards to its strategic platforms, but will use grandfathering arrangements for other platform offerings, Gale said.
Under this arrangement, the intention is Count will source platform infrastructure and administration services from a couple of key platform partners and replace its current arrangements with platform providers, although Gale would not at this stage clarify how many of the current platform partners providers would be affected.
The total implementation costs of the changes are currently estimated as being less than $500,000, and as a rough estimate Gale said the additional ongoing costs were likely to be somewhere between $1 million and $1.5 million.
Gale anticipated the majority of the reforms would be beneficial to Count.
Larger licensees such as Count are able to transform their businesses to ensure they continue to receive revenue essential for service provision and financial liability but smaller groups will find the changes more challenging, he said.
The reforms would also create financial pressures on many groups and lead smaller licensees to seek consolidation, which would also favour larger licensees such as Count, Gale said.
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