ifa understands that Godfrey Pembroke’s leadership group is intending to leave the MLC network they joined in 1999 and set up as a non-bank dealer group under its own AFSL.
Separation from NAB has been an ongoing debate within the Godfrey Pembroke group in recent years, as member firms sought greater control over technology and APL decisions and sought to inoculate themselves against reputation damage stemming from big four bank scandals.
In 2016, two of Godfrey Pembroke’s more prominent authorised representatives, Hobart-based Collins SBA and multi-state firm Praescius, left the network to set up under their own AFSLs with the assistance of NAB’s Licensee Partnership Program.
The development prompted ifa to predict a broader Godfrey Pembroke exit and similar moves by other institutionally-owned dealer groups.
In a statement to ifa, NAB general manager, advice, Ross Barnwell stopped short of confirming a split but issued a statement indicating the bank will seek to work with Godfrey Pembroke practices into the future.
“I regularly speak to Godfrey Pembroke advisers, and I value the relationship we have with all of them, including the Practice Development Group,” he said.
“We believe customers and advisers rightfully place great value and trust in this network, and so does NAB”
Mr Barnwell added that the bank remains committed the various arms of its wealth management business.
“NAB equally values the relationship we have with advisers that choose to enjoy the institutional support we provide through our various advice models,” he said.
“We remain committed to ensuring customers have access to advice that meets their needs and continuing to improve the support we offer advisers in providing high quality advice services.”
The comments differ from the testimony of his boss, Andrew Hagger, who told the royal commission that institutional appetite for authorising advisers is waning as the “risk-return equation” has become less favourable.
Godfrey Pembroke was formed in 1995 by the merger of non-aligned firms Godfrey Weston and Pembroke Financial Planners. It joined the MLC network in 1999 ahead of the NAB acquisition in 2000. It has more than 130 authorised representatives.
GPL is likely worth nothing as I doubt the licensee makes a profit, it might break even. In terms of goodwill who would pay for goodwill in this industry (ANZ sold ‘badwill’ though to IOOF… well done!)?
This lack of licensee value is a result of vertical integration, GPL advisers may think that they are step closer to independence (than NAB/MLC advisers) however they aren’t and without NAB propping up their systems, research, compliance etc they wouldn’t exist as a licensee.
The advisers/practices leaving will pay a premium to do so (higher self-licensing costs), they will also no doubt forego the GPL brand (for what it is worth) – NAB won’t be giving it away.
The same conversations are no doubt occurring in Apogee and similar other bank aligned self-employed/self-owned licensees.
Serious question – what reimbursement do NAB receive for GPL leaving them? They paid a purchase price to bring them in. I assume there is a sale price as well?
Nothing, the licensee isn’t worth anything… the clients are where the value lies. They are self-licensing under their own brands not conducting a management buyout of GPL.
Yes, the holier than thou crew are tsk, tsk, tsking and wagging the finger, the AIOFP (gee no trouble there in the past, now old GP…) but you’d suspect that skeletons remain in the closet for all sectors of the industry.
Great initiative – congrats and best of luck to gpl leadership and advisers
Perhaps before Godfrey Pembroke starts waving the holier than thou banner someone should investigate how they charge for on-going service and what service they ACTUALLY deliver for that charge. There’s no doubt the banks and AMP have condoned the misnomer of on-going service but the questionable client charging environment is rife across the industry.
How do you know that “questionable client charging (environment) is rife across the indutry Please let us have some detail on this extraordinary insight that you feel compelled to tell us about. Do you have a proper sample and factual evidence to support that statement.
Please refer to the RC transcripts from the financial planning hearings. -length of details there.
No in the main the Banks and AMP were examined at the RC. That’s not the whole Industry. So the first statement is quite false and defamatory.