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Genesys closure highlights due diligence need

Associated Advisory Practices has warned advisers to choose licensing arrangements carefully, as AMP moves to shut down its Genesys dealer group.

In a statement, AAP chief executive Soula Cargakis said choosing a dealer group is a big decision and practices need to conduct “thorough due diligence” to ensure compatibility of business model and values, referencing the "impending closure" of Genesys.

"Obviously, there are many advisers who are quite happy working under the constraints of a major institution,” Ms Cargakis said.

"However, successful, entrepreneurial practice owners who are looking for flexibility and choice in running their business are unlikely to find it with a major institution.

"Some firms may be much better off obtaining their own licence and buying in the support and services they need, in line with their business strategy and professional values.

“Excellent advice tools and back-office systems, paraplanning, compliance and governance, acquisition funding, and succession planning solutions are all available outside of the major institutions.”

Commenting in the same statement, John de Zwart, CEO of AAP parent company Centrepoint Alliance, said the last week’s FOFA disallowance and debate highlighted “just how big the perception problem is that the major institutions have with both advisers and their clients”.

“I think we will increasingly see good professional practices questioning the value of being part of that,” he said.

Sterling Publishing will be releasing ground-breaking research on licensee switching in coming weeks. To register your interest email [email protected]