Sydney-based dealer group Fortnum Financial Advisers has announced it is purchasing the 20 per cent stake in its business currently owned by ANZ Banking Group, as a result of a legacy investment by ING Australia, prior to its acquisition by OnePath.
Fortnum executive chairman Ray Miles told ifa yesterday that a desire to be described as an “independently-owned” firm largely drove the decision to free the licensee of institutional ownership.
“ANZ and OnePath have been a good partner and we have a good relationship with them, but being at 20 per cent is neither here nor there,” Mr Miles said. “It’s a nuisance for both of us and didn’t make sense. It was preventing us from being called independently-owned.”
More broadly. the dealer group boss anticipated a shift in consumer demand for independent financial advice, which he says gives a non-aligned advice business a “strategic advantage”.
“The Australian public are looking for places they can go for non-conflicted financial advice and finding it pretty difficult,” he said.
“We have been through this stage of consolidation, but I don’t think that’s relevant now. I think there are a lot of people sitting [on institutionally-owned licences] that wish they hadn’t joined.
“We will now go through a period of deconsolidation.”
The announcement comes despite research released by Roy Morgan in mid-2013 suggesting consumers are confused about the levels of institutional ownership of financial planning groups.
Good call Ray.
Good advice has clearly got to be seen to be coming from the right side of the desk, as well as actually coming from that side of the desk.
Gerry, I often agree with you but this time I don’t. An increasing number of clients are becoming more interested in who owns the licencee. Admittedly only small but I have noticed an increase over the last couple of years. I suspect it may further increase in the future.
Being unshackled from insto’s also provides great strategic flexibility.
One group buying out their insto holding doesn’t mean much. How many of them can afford to even consider that? Do consumers even care? Are they in fact confused about ownership because they actually don’t care?
Great to hear Ray! This inevitable path lets the fundies do what they do best – produce good funds – and lets Fortnum does what it does best – produce great advice! It’s the way of the future and I predict will be followed by other ING groups and NAB groups..
Time to dump my bank-owned Dealer Group I think. Just checked these guys out – this is one of the few Licensees with all of the important fundamentals. Non-Institutional owned, only quality high growth practices and their own UMA. Not only that, the practices own the Licensee and keep all the profits. This is far better than a single practice AFSL.