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Insto exodus underway: Netwealth

Netwealth Advice Group has reported a “substantial increase” in the number of advice practices seeking to exit institutionally-owned dealer groups.

A minimum of five enquiries per week have been flooding into Netwealth’s Pathway Licensee Services business from advisers interested in applying for their own AFSLs as well as seeking technology and professional development services aimed at boutique groups.

“Advisers are seeking a change from the larger institutionally-owned licensees as they are increasingly seeing their relationship focused solely on product and numbers, and they really feel this is impacting on their ability to provide flexible solutions to their clients,” said Netwealth's head of advice development, Peter Boston.

In addition, Netwealth’s Financial Planning Services Australia licensee has also been seeing interest from institutional breakaway practices, including the recruitment of three practices in the past 12 weeks, and additional inquiries from 23 practices. 

“Since February, the Netwealth Advice Group has had increased activity in both appointing financial planning firms within [FPSA] and also establishing AFSLs for financial planning firms that wish to operate as an IFA under their own [licence],” said Netwealth head of advice Simon Micallef.

“The shift of financial planning firms from large, institutionally-owned Licensees is well in play and this will continue to grow as financial planners assess their current position, the current value they are receiving and the continued restrictions being imposed upon them.”

The revelation comes as a number of practices within AMP’s Genesys network have expressed displeasure with the product recommendation process within the group and are threatening to exit.

A number of AFSL consultants previously suggested to ifa that the Commonwealth Bank advice scandal may in no small part be fuelling the apparent uptick in self-licensing demand.