Earlier this month, in an ASX listing, Centrepoint threw its support behind the government’s response to the Quality of Advice Review (QAR) and its enactment of the experience pathway, both of which, it said, have primed the industry for growth.
“Combining these regulatory developments with Centrepoint Alliance’s performance, we find ourselves well positioned in an industry primed for growth,” said Simon Swanson, chair at Centrepoint Alliance.
Back in 2021, Centrepoint acquired ClearView Advice, a move, it said, that has continued to display its benefits throughout the past financial year.
Namely, in 2022–23, Centrepoint said it completed the integration activities “successfully”, with the company said to be fully benefiting from both the scalable and efficient operating model.
Looking at the broader advice market, Centrepoint said it has observed “encouraging” signs of market recovery.
“Adviser numbers across the industry have stabilised in the last three quarters following adviser exists triggered by the Financial Adviser Standards and Ethics Authority exam requirements, after a significant decline over the prior 16 quarters,” said Centrepoint chief executive officer John Shuttleworth.
Moreover, he highlighted emerging “green shoots” and growth among professional year graduates.
As at 30 June 2023, Centrepoint had 511 authorised representatives operating under the company’s licenses, with 196 self-licensed practices supported by an estimated 797 advisers.
“We continue to solidify our position as one of the leading destinations for advisers,” Mr Shuttleworth said.
He noted that a key factor in the firm’s “attracting and retaining advisers” has been its commitment to service quality. Namely, in the past financial year, Centrepoint completed 34,000 service requests, resulting in a 27 per cent year-on-year improvement in response times.
Centrepoint Alliance also reported that its EBITDA rose 6 per cent in the fiscal year 2023 to $7.6 million, driven by increased gross profit from its acquisition of ClearView Advice. Profit before tax added 154 per cent to $6.6 million, while gross revenue jumped 19 per cent to $271.6 million.
“Our strategy to develop additional sources of revenue is gaining momentum,” Mr Shuttleworth revealed.
This has included the addition of Lending as a Service, which, he noted, has been embraced by advice firms, with 30 firms participating and an additional 27 in the pipeline.
“In the June quarter, we averaged 45 monthly leads, resulting in over $25 million in settled loans and an additional $20 million in loans being finalised.”
Moreover, the firm is progressing its strategy to grow its managed accounts.
“As we enter FY24, we are optimistic about the market, positive regulatory changes, our business strength, and the proven execution capability of the management team,” the CEO added.
“The market for financial advice remains buoyant, driven by the complexity of the interplay of superannuation, tax, and social security. This high level of demand enables advisers to be more discerning about the clients they serve, providing them with the ability to increase fees and grow top-line revenue,” he continued.
“After many years of tightening regulation, we are now operating in a professionalised industry and are witnessing positive regulatory changes resulting from the Quality of Advice Review.”
Mr Shuttleworth also praised the government for its receptiveness to “practical changes” in the regulatory environment.
The sooner we get rid of the licensing regime the better it will be for Australians. These firms serve little value. As a “Centrepoint Alliance” adviser, yes the future may be bright for the industry, but I don’t think it’s bright for these reasonable sized firms that become goliaths.
Exactly! how much of clients money goes towards paying for licensees, its and astronomical amount that gets clipped by them. What if there was a central compliance & governing body set up for the industry. $2k per adviser nets about $30m to run it.