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YBR tips mid-tier licensee comeback

Lack of innovation from the banks will see a resurgence of entrepreneurial mid-tier financial planning licensees, according to a Yellow Brick Road (YBR) wealth executive.

With commentators in the financial advice industry often centring on boutique and bank-aligned advisers post-FOFA, YBR head of wealth management Grant Pearson told last week’s AFA conference that mid-tier non-aligned dealer groups should not be written off just yet.

“The innovators are coming,” Mr Pearson said. “And we’d like to think we’re one of them,” he said, adding that the banks are often not well placed to drive innovation due to internal bureaucracy and large-scale creating conflicts."

Consumers are showing demand for independence from Australian financial services licence (AFSL) owners, Mr Pearson said, revealing that YBR has turned down a number of acquisitions in order to maintain its competitive advantage and “corporate culture”.

“We came very close last year [to making acquisitions] and we were very tempted to bump the numbers up and keep the analysts happy; it was very very tempting, but we have spent a lot of time in conversations with various stakeholders and realised that if people are joining us, they want to be part of a smaller group,” Mr Pearson said. “That’s one of the ways we compete against the big boys.”

The great challenge for mid-tier dealer groups, the YBR executive said, was not compliance or temptation of selling out to larger institutions, but balancing growth with retaining the corporate character of the company.