Director Anne Fuchs said that licensees that are looking to build funds under management (FUM) by handing out cash to advisers are unsettling the overall stability of the industry.
“If advisers are unhappy with their licensee, they will come to that conclusion in their own time,” Ms Fuchs said. “Encouraging them to shop the business around to the highest bidder does not reflect the professionalism we are all working towards.”
“If RSVP or eHarmony started running marketing campaigns targeting married couples to explore whether the grass is greener on the other side of the fence, people would be outraged and rightly so.”
“A business model that solicits financial planning firms and encourages them to shop their business around to the highest bidder is exactly the same in principle,” she added.
Ms Fuchs said licensees that pay for a FUM transition are likely to be looking towards an agency-type model.
Instead, she said quality dealer groups with clear value proposition will succeed under the new professional fee for service arrangements.
“The decision on which dealer group is right for an adviser comes down to a complete review of a short-list of potentials to ensure they are aligned with business needs,” Ms Fuchs said.
“It is also worth remembering that like all things in life, advisers will get what they pay for.”
What about newer practices looking for capital or cash flow support to growth.
I get the dirty money argument but its not always possible to take the high road. Some of the licensee offers are very generous but they are not a hand out – they are there to help a practice grow or support a succession plan. For some Licensees this is integral part to the value proposition.
Lets not get to emotive, this is business not a dating.