According to a document seeking feedback from advisers on the proposal, Elders noted shareholder concern for the future economic viability and sustainability of the dealer group.
“Recent changes to the financial planning industry mean that it is increasingly difficult for Elders Financial Planning, as a small-scale dealer group, to generate the income required to cover higher regulatory compliance and insurance costs,” Elders said.
“Despite a concerted strategy to increase scale, which would alleviate some of these costs, it has become clear that the scalability required is not achievable in the current climate.
“The shareholders of Elders Financial Planning, therefore, have concern for the future economic viability and sustainability of Elders Financial Planning.”
As part of the wind up, Elders has a view to advisers transitioning to fellow IOOF-owned licensee Millennium3 or another AFSL.
Advisers under the Elders umbrella have deadline of 10 October to provide feedback.
In October 2017, ANZ reached an agreement to sell its aligned dealer group businesses, including Elders Financial Planning and Millennium3, to IOOF for $975 million.
ifa sister publication InvestorDaily reported last month that the IOOF-aligned dealer groups have been a loss-making venture that contributed a $16 million after-tax hit to the group in the 2019 financial year.
Further, research house Morningstar forecast the ANZ-aligned dealer groups will generate an even greater loss of $21 million this financial year.
[quote=Sad but true]Dear Concerned, this is a deliberate strategy to wipe out the Bank’s competition, ‘You and I’ !. The Banks will employ freshly minted FASEA degree qualified inexperienced graduates on basic wages to look after all their new orphaned clients and then soak these clients in vertically integrated products, whether these suit the clients of not. Low cost distribution, without any competition, how good is that. And… what are the AFA and FPA doing about this, zero. What is your next career going to be?[/quote][quote=Sad but true]Dear Concerned, this is a deliberate strategy to wipe out the Bank’s competition, ‘You and I’ !. The Banks will employ freshly minted FASEA degree qualified inexperienced graduates on basic wages to look after all their new orphaned clients and then soak these clients in vertically integrated products, whether these suit the clients of not. Low cost distribution, without any competition, how good is that. And… what are the AFA and FPA doing about this, zero. What is your next career going to be?[/quote]
You need to take your medication. If you think you are entitled to all clients you will go way of cab driver. Elders no scale too much cost simple equation.
@concerned – The Parliamentary investigation into FoFA held last year said that reduced numbers of advisers, job losses in the financial planning sector and failed businesses….. were not an issue to be concerned about. Therefore, hopefully you’ve made your financial planning business bullet proof.
Agree with Steven the FPA have a lot of answer for when it comes to acting on behalf of members. Time for a new association and I hope someone starts one up or members step up and kick product manufacturers out for good.
Old risky sounds like your talking out of you backside, i am an Elders adviser and I have many many very engaged clients who are farmers maybe you should consider your “old risk”sales tactics as rhe reason they didnt buy from you. mayne before having a crack at them you educzte yourself on the facts !
Elders were mainly rural – with lots of time wasting cockies as customers . The drought has absorbed any cash they had for insurance premiums and investments long ago. Lots of travel & late appointments – but no cigar. Feel sorry for their advisers – yet another adviser loss from the bush, and AMP will kill bush advisers entirely.
@sad but true, exactly right. All of the new university entrants wont be able to express an opinion on an investment/philosophy or do what they believe to be right for the clients. These “advisors” will be tick a box compliance people.
Is this a case of the cost of compliance strangling both Financial Planning business’s and now Dealer Groups. Well done ASIC!
Pity the poor buggers that just purchased an Elders business. Another round of SOAs and that is just the start. Bet the green machine puts all D Gs in their fold under one umbrella and watch the nightmare begin.
Dear Concerned, this is a deliberate strategy to wipe out the Bank’s competition, ‘You and I’ !. The Banks will employ freshly minted FASEA degree qualified inexperienced graduates on basic wages to look after all their new orphaned clients and then soak these clients in vertically integrated products, whether these suit the clients of not. Low cost distribution, without any competition, how good is that. And… what are the AFA and FPA doing about this, zero. What is your next career going to be?
Another business DESTROYED by the FPA.
What moron out there is still an FPA member? Unbelievable, why are you knuckle draggers still supporting this criminal organisation who have snipered you at every corner for the last two decades.
Unbelievable this corrupt company is still alive today.
Appalling that one of best run businesses in Australia are being closed
be interesting to see where the losses were coming from
didn’t this mob win a compliance award last year
another one bites the dust… the industry is now a weekly episode of Survivor!
If it is predicted that IOOF’s dealer groups will make a loss of $21mill next year, how long before they close down their remaining DGs? Don’t the powers that B see it as concerning that there is a contraction in the market place of DG,s? Increase costs of running a DG and lack of choice in the market will contribute even further to pushing affordability of financial advice out of reach of the average Australian.
Is this an unforeseen consequence or a deliberate strategy?