Yesterday, ifa revealed that a number of the largest Genesys Wealth Advisers practices have formally joined the Magnitude AFSL within Westpac’s BT Select network following AMP’s decision to close its former licensee.
Speaking to ifa, BT general manager, group licensees, Phil Butterworth said the mass recruitment comes off the back of strong growth figures over the past three years, with BT Select now encompassing 220 advisers across 70 practices.
“We are very pleased to have this calibre of advisers and practices joining BT Select,” Mr Butterworth said. “BT Select continues to attract like-minded practices that are looking to grow while having access to the resources of an organisation such as BT Financial Group.”
Reflecting on the news, a number of separate sources with intimate knowledge of the matter told ifa that the practices were incentivised via lucrative sign-on payments “mirroring AMP’s lucrative offer” – of three times margin, as previously revealed by ifa – with one firm allegedly receiving a payment upwards of $1 million.
The alleged payments allowed the former member firms to extricate themselves from equity stakes held by AMP under the ‘Genesys Gem’ model implemented in a majority of Genesys practices.
However, BT has vehemently denied the allegations, with a spokesperson telling ifa the figures quoted are “simply untrue” and “nowhere near that size”.
Asked whether smaller sign-on payments were offered, the spokesperson said the “commercial arrangements” in place with the new Magnitude practices could not be discussed further.
ifa understands that at least some of the practices are long-time users of the Solar BT white-label platform, with one incoming recruit saying use of the platform was a “sticking point” in disputes with previous parent company AMP.
Another former Genesys adviser listed “open architecture” and “strong compliance culture” as the factors leading to his decision to join BT, but would not be drawn on whether a ‘sign-on’ deal was negotiated.
The spokesperson said dealer groups under the BT banner have broad approved product lists.
Last week, AMP CEO Craig Meller said he was “not at all concerned” by the movement of Genesys advisers to other financial planning networks and that its decision to close the group was “purely financial”.
editor@ifa.com.au
“The real issue for the businesses that left perhaps reflects more on how AMP is really supporting BID,education, ethics”
Ethics…LOL
I bet Mum & Dad account holders at Westpac are rapt with more “million dollar payments” being forked out to incentivise their financial planners.
Lets not quibble. Commercial terms were offered, they were probably excessive, but that is one of the flaws in the industry. The government should spend more time investigating this type of activity and stop blaming advisers for how advice is delivered. But at the moment BT either directly or through the broader Westpac group agreed some terms quite within the law – you don’t have to agree you just need to accept. The real issue for the businesses that left perhaps reflects more on how AMP is really supporting BID,education, ethics etc. As Mulder used to say “the truth is out there”. Perhaps AMP is in denial that advisers must have some degree of choice to offer the best advice to their clients. AMP is a good business for a narrow scope of advice and excellent for direct customer support but the adviser is fitting less and less into their plans – is that a reason why the firms left? Its a competitive market and advisers are free to go where the offer best suits them.
For some of these planners this is their 3rd corporate cheque. Associated planners to Genesys, Genesys to AMP, AMP to BT. I do think it is odd however that BT are paying for platform business it already has and was never going to lose.
Ah, ducking and weaving. The ‘payments’ were nowhere near that size – but there were some payments probably dressed up as transition support or expense reimbursement. BUT there were concessional finance agreements with lower rates and longer repayment periods. BT has been offering this beyond Genesys.
It’s still about ‘how to get someone to move’ beyond service, price and other factors.
And yes there is officially an open APL BUT a clear understanding that ongoing support for BT will be forthcoming in return for the ‘concessions’ and ‘small payments’. There is nothing wrong with this and it is commercial as long as clients get the best deal. Do they actually ?
AMP has stuffed this up and commercial forces with questionable motives thrive.
Unfortunately, AMP Management did an extremely poor job of communication with the Genesys Firms. Well, actually it turned out in truth to be lip service until they had everything organised to wind up the Group. Genesys Firms are leaving because AMP/Charter are proving to be incompetent, inflexible and narrow minded and there will be far more over the rest of this year that will exit. The ‘Lucrative’ payment is irrelevant to any decisions that have been made. AMP can’t even provide a seamless transition internally across their own Licensees yet BT lead the way in their ability to transition externally. Very happy.