Centrepoint records profit turnaround in FY19
Centrepoint Alliance has rebounded from a loss-making FY18 to record a $1.2 million profit in FY19, something it says vindicates its move to a fee-based revenue model.
The licensee had recorded a $3.4 million loss in FY18, Centrepoint said in a statement to the ASX.
Further, it recorded earnings before interest, tax, depreciation and amortisation (EBITDA) of $2.4 million, compared with a $1.6 million loss in FY18.
Centrepoint chief executive Angus Benbow said the FY19 results validated the new strategy announced in August 2018 to move to a fee-based revenue model, saying 86 per cent of firms (195 of 227 firms) in its network had transitioned to the new pricing model.
“Last year, we embarked on a new strategy to focus on providing services to advisers, with the introduction of a new pricing model which repositions the business for growth. I’m very pleased to say these initiatives are showing strong signs of success,” Mr Benbow said.
“The financial advice sector’s business model need to change. We are leading by example and we were one of the first scaled advice businesses to reset pricing.
“Our revenue mix is moving to be predominantly sourced from service fees paid by advisers.”
As for FY20, Mr Benbow said that Centrepoint’s areas of focus are to:
- Launch fee-based offer for self-licensed advisers;
- Drive continued growth in licensed network; and
- Further invest in technology and data to enable greater scale and superior service to advice firms.
Centrepoint chairman Alan Fisher said the network is well placed to take advantage of the disruption in the wealth management sector.
“Our business transformation is progressing well, and we remain focused on assessing partnerships, acquisition opportunities and enhancing shareholder value,” Mr Fisher said.
“During the year, we have welcomed new advice businesses to the network and continue to see financial advisers proactively looking for a quality business services partner.
“In fact, we recruited a record number of new financial advisers in the fourth quarter of FY19. We continue to assess more firms, as they are increasingly attracted to our service offer.”
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