Licensees who think they can survive in the post-FOFA environment without being vertically integrated are naïve, according to dealer group Professional Investment Services (PIS).
John de Zwart, managing director of PIS parent company Centrepoint Alliance, said dealer groups are deluding themselves if they think they can survive on licence fees alone.
With grandfathered volume rebates set to fade away over time, alternative revenue streams need to be built into financial planning dealer groups, he said.
Centrepoint owns two in-house products – Ventura and All Star Funds.
“Ventura is managed by Russell Investments. We're not the responsible entity – we have that outsourced to Equity Trustees,” said Mr de Zwart.
“But we do the coordination and management – the selection of who is the investment manager underneath that,” he said.
Centrepoint is also looking at creating some low volatility, outcome-orientated in-house products and has put out a tender to a number of investment firms.
“We're looking to provide some non-implemented portfolio solutions to our practices before Christmas and then implemented solutions hopefully [in the] first half of next year,” said Mr de Zwart.
Financial advisers should not be in the stock-picking game, he said, and Centrepoint is looking to create products to facilitate that.
But at the same time, Mr de Zwart described PIS as operating in the “independent” space.
“There's a real need in the independent space for a financially secure, good proposition service model to allow people to migrate away from the institutions back into the independent space,” he said.
“We want to build that business that is going to support them, and a big part of that is being financially strong – and we have to get reasonable margins from providing our services,” Mr de Zwart said.
The ifa Excellence Awards are back in 2021 and nominations are now open! This prestigious accolade recognises exceptional professionals within the financial advice industry, shining a light on the outstanding achievements from the nation's best and brightest. If this sounds like you or someone you know, then nominate today for the ifa Excellence Awards 2021!
The latest ASIC estimated industry funding levy proves that the current formula is “not equitable or sustainable” according to FPA. ...
An industry body says it is in favour of a change in government as the Coalition have “unfairly targeted” financial advisers. ...
The corporate regulator's cost recovery implementation statement for the 2021 financial year indicates the costs allocated by ASIC to the advice secto...