Licensee problems driving practice sale approaches
While a majority of financial advisers say they are rarely or never approached to sell their businesses, some groups such as the troubled Australian Financial Services (AFS) Group are still providing hot spots of activity.
A recent ifa straw poll completed by 133 respondents found 13 per cent of respondents are approached with offers at least monthly; 7 per cent said they are approached weekly or more.
Financial planning practice broker Stephen Prendeville says the planners who are being contacted at least weekly are most likely operating under dealer groups that are “facing certain challenges” – citing Australian Financial Services (AFS) in particular.
“It’s widely expected that AFS will be handing back their licence at the end of this month. Imagine if you were a principal owning a practice under that dealer group – everyone would have approached you,” said Prendeville.
It would be unusual for a financial adviser to be approached every week unless there was an underlying reason, he added.
In the same vein, every Professional Investments Services authorised representative would have received offers “from all market participants” a few years back, Prendeville said.
The ifa straw poll found fifty-seven per cent are approached ‘rarely or never’; 30 per cent only receive offers ‘a few times a year’; 6 per cent are being approached ‘once or twice per month’; and 7 per cent are being approached to sell their business ‘weekly or more’.
According to Kenyon Partners chief executive Paul Tynan, the less frequent offers to sell are most likely coming from individual planners.
Rather than wielding chequebooks themselves, institutions are encouraging their authorised representatives to make acquisitions, said Tynan.
“If [a big institution] was out there buying they’d be moving away from a self-employed model to a salary model,” he added.
“People think it’s the instos [making these offers] – but it’s not. AMP will have a couple of HR consultants, but they might be representing someone from [AMP-backed dealer group] Genesys, for example,” Tynan said.
Click here to have your say in the new ifa straw poll: which of these fee for service remuneration models is best practice?
Former NSW adviser banned following conviction
BREAKING ASIC has permanently banned a former NSW-based financial adviser follow...
Westpac brings in new ‘battle-hardened’ chairman
Westpac has appointed a successor to replace outgoing chairman Lindsay Maxsted. ...
Advice in ‘flux’: HLB Mann Judd
It’s the best of times and the worst of times for financial advisers, with ind...