Insignia adviser numbers struggle to stabilise

There were 1,413 financial advisers in the Insignia Financial network as at 30 June 2023, 70 fewer in total than the previous quarter and 28 more losses than those seen in 3Q23.

According to the firm, this comprised 242 advisers in the Professional Services (employed) channel and 1,171 advisers across its Advice Services channels (self-employed and self-licensed), with all losses belonging to the latter.

In a business update to the ASX on Thursday, Insignia confirmed that adviser numbers in the Professional Services channel have levelled out following the integration of MLC Advice into Bridges.

Meanwhile, the firm said that the reduction of advisers in the Advice Services channel “largely reflects the closure of Lonsdale”, with a number of advisers transitioning to Consultum or moving to self-licensing through Insignia Financial’s Alliances offer.

Insignia’s advised platform saw improved flows during the quarter, with net outflows reducing to $180 million. This improvement was credited to strong inflows into its Evolve platform.

The firm also noted that during the year, Expand Extra, Expand Essential, and Shadforth Portfolio Services, which are hosted on Evolve, added a further $1.9 billion of net inflows.

In its 4Q23 update, Insignia reported a $3.7 billion or 1.3 per cent increase in funds under management and administration (FUMA) to $295 billion.

The firm also said it had achieved its positive net inflows target for FY23 – total net inflows for the quarter were $65 million, bringing full-year inflows to $667 million on a continuing basis.

“We saw continued momentum in flows delivering positive net inflows across both our platform and asset management businesses,” commented Insignia chief executive Renato Mota.

Insignia had $209 billion in funds under administration (FUA), up 1.7 per cent or $3.5 billion, thanks to positive market movement of $4.3 billion combined with net inflows of $19 million for the quarter.

However, the firm said this was partially offset by pension payments of $782 million.

Meanwhile, funds under management (FUM) grew by $183 million to $85.9 billion, driven by positive market movement of $1.6 billion combined with net inflows of $46 million.

According to the firm, this was reduced by $1.5 billion as a result of transfers between OnePath OptiMix and IOOF MultiSeries products.

Insignia’s Workplace Super offering delivered positive net inflows of $648 million during the quarter, bringing full year net inflows to $2 billion.

Insignia delays MLC migration

Following feedback from advisers, Insignia announced that the planned migration of MLC Wrap to Evolve has been pushed back from 1H24 to 2H24 to “ensure adviser readiness for the chance, and to deliver the best client and adviser experience”.

This is part of a number of key initiatives set out by the firm, including its intention to reset its financial advice operating model to “competitively leverage opportunities for sustainable growth”.

Insignia said that while this new business does not have a brand name locked in, it is being developed under the working name of Advice Services Co, or ASC. It will work as a new partnership ownership model for its self-employed licensees, which comprises RI Advice Group (RI), Consultum Financial Advisers (Consultum), and TenFifty.

The firm also said it has decided to combine the various technological capabilities between its Wrap and Master Trust platforms under a shared ecosystem.

According to Insignia, this will include two “registry platform pillars” – its proprietary Wrap platform “Evolve” and a Master Trust platform based around fintech FIS Global’s compass registry, which currently supports existing MLC Master Trust capabilities.

“Since completing the acquisition of MLC in May 2021, our priority has been the safe and timely integration of MLC and the creation of Insignia Financial. This has resulted in the accelerated delivery of benefits aligned to management’s original three-year plan,” Mr Mota said.

Looking forward, Mr Mota added that FY24 represents the final year of its “three-year horizon”.

“Our update today reflects the strong progress we have made in delivering to our strategic priorities as we continue to simplify the business,” he said.

“Through the transformational initiatives announced, we are well positioned for opportunities ahead as we build a business that is adaptable and aligned to our ambition to improve financial wellbeing for all Australians.”

Further details, along with Insignia’s FY24 outlook, will be released with its full-year results next month.