On Thursday morning, Insignia Financial reported positive underlying net profit after tax (UNPAT) of $95.5 million and revenue growth of 3.8 per cent to $107.6 million. The firm attributed this financial upswing to increased ongoing client fees resulting from strategic repricing efforts in Shadforth Financial Group and Bridges Financial Services.
Speaking to ifa on Thursday, outgoing chief executive officer Renato Mota said despite adviser outflows over the last few years, the firm is a lot more profitable today than it was with a larger adviser count.
“If you reflect on where we were maybe three years ago, we would have had more numbers but we were losing close to a $100 million before tax so that’s not exactly a sustainable business, and created different sorts of issues,” said Mr Mota.
“I think for advice businesses to prosper they need investment and they need to be sustainable, so our focus over the last two years has been the sustainability of the business model, which we’ve now corrected given that we’re now back into the positive territory. So now it’s about growth and I think Rhombus gives us a great opportunity to grow in the self-employed space, as does Shadforth and Bridges in the profession space.”
Insignia last year announced the “resetting” of its advice operating model, which, it acknowledged in January, is “progressing” with the Rhombus Advisory entity (formerly known as Advice Service Co) established.
Insignia first announced this new model back in July, and at the time, said that it represents the ambition to create Australia’s largest adviser-owned licensee group, positioning it to capitalise on the dynamic self-employed advice market with the support of Insignia Financial.
Rhombus is also expected to enable the firm to focus on the growth of its professional services advice businesses, Shadforth Financial Group and Bridges Financial Services, expanding the scope of advice through superannuation and to leverage future opportunities presented by the government’s response to the Quality of Advice Review (QAR).
“It’s been great to see some of the growth in Bridges over the six months, Shadforth having a record year, so it does feel like we’re getting back into growth in advice after a few years of heavy lifting,” Mr Mota told ifa.
Rhombus, too, is said to be popular among advisers, even before its planned launch in July.
Touching also on the QAR, Mr Mota urged the government to enact the recommendations.
“It’s the only way we’re going to see these benefits and these ideas actually come to fruition and benefit Australians. At the moment, they’re pieces of paper and we need them to turn into actioned business models and opportunities,” Mr Mota said.
Ultimately, he thinks that financial advisers are heading towards a “truly prosperous” period, driven by the upcoming reforms.
“We look forward to participating in that.”
According to Wealth Data, following the divestment of Godfrey Pembroke, Insignia will have some 727 advisers.
