Adviser losses to continue until 2024

Addressing Sequoia Financial Group’s AGM on Thursday, the group’s chief executive Garry Crole said he expected a recovery in adviser numbers “would not occur before 2024 despite the increase in demand” for advice.

Mr Crole said the exit of the major institutions from the industry had driven a shift away from subsidisation of advice, which “has seen an increase in the delivery cost to advisers”.

“The shift, however, should increase confidence to the 12 million working Australians who need help to understand the various complexities of strategy and product without any conflicts between the two,” he said.

Mr Crole unveiled ambitious targets for the group in his presentation, saying Sequoia wanted to grow to $400 million in revenue by 2024, from $84.5 million in the 2020 financial year.

He suggested the group would do this by increasing the scale of each of its businesses – including its licensee services business incorporating dealer groups Interprac and Libertas – to form “stand alone profit centres”, while boosting the number of third-party licensees using Sequoia-owned services such as SMSF administration and legal documents.

Echoing previous comments to ifa, Mr Crole added that the group hoped adviser numbers under Sequoia-owned dealer groups would reach over 1,000 by 2024, “which we believe is the optimal number to optimise the return on revenue, share cost synergies with clients and create the premium advice brand”, he said.

Sequoia currently has 415 authorised representatives under its dealer groups and expected to grow this number to 450 by the end of the 2021 financial year, Mr Crole said.