Dealer groups ‘addicted’ to advisers’ hard work

Describing his company as the “anti-dealer group”, Omniwealth managing director Matthew Kidd told ifa that larger licensees have become obsessed with growth at the expense of nurturing their network of advisers.

“Dealer groups should focus on their advisers and clients, rather than the actual dealer group entity,” he said. “Most dealer groups have got so used to feeding off that entity that they become addicted to it and they need it.

“They are reliant on benefiting from an adviser’s hard work – it’s nuts. The more work an authorised rep does and the better they do, the more the dealer group earns. It’s wrong, it’s fundamentally incorrect.”

Mr Kidd says that charging flat fees is a more appropriate model for a licensee looking to grow its authorised representative network.

Omniwealth, he said, is receiving considerable interest from advice firms looking to leave their current licensing arrangements and join the small dealer group.

These prospective authorised reps are attracted to its fee model as well as its specialisation in self-managed superannuation and mortgage broking, accounting, property and legal referral opportunities, Mr Kidd said.