Speaking to ifa, director of Forte Dealer Solutions Steve Prendeville said advisers fleeing institutional advice firms are opting for small, non-aligned firms or obtaining their own licences and are avoiding the bigger, non-aligned dealer groups.
Mr Prendeville said mid-tier licensees are struggling to pick up advisers because, as they grow, the business culture becomes too similar to that of a major institution.
“It’s the little guys who are doing well. A lot of those leaving instos are going to the sub-100,” he said.
“One of the greatest value propositions a mid-tier dealer has to offer is its culture – that’s what it has when competing with the instos and the independents.
“The challenge for mid-tier dealer groups now is for them to maintain their culture as they onboard and grow – some of them have been growing by 50 per cent from this time last year.”
Mr Prendeville said, for many people who have been in this game for a while, the fun has disappeared and so this is where and why mid-tiers are successful – because they can articulate their culture and it is normally around fun.
But the biggest challenge they have is the maintenance of culture as they grow.
Mr Prendeville said good culture is something that will always be lacking at a major institution because of the rules and compliance restrictions that inhibit “fun”, work flexibility or encourage an entrepreneurial culture.
“What the mid-tier dealers need to become better at, if they’re going to catch the advisers coming through from the institutions, is articulating their culture well and then maintaining that as they expand,” he said.
Oh Ive got it now Mr Prendeville your article is actually not a impartial journalistic piece but a advertisement for your business. Quote from you – “Additionally Forte Dealer Solutions daily business is assisting practices to move to most appropriate licencing arrangements” makes sense now thanks cleared that up !
Mr Prendevill, maybe going back and understanding ‘causation’ and ‘correlation’ may help with supporting your opinion piece. Per capita consumption of cheese in the US correlates with number of people who died by becoming tangled in their bedsheets, makes you think right??
IFA/ Forte Dealer Satisfaction Survey Sept 2016The survey itself was one of the most in-depth studies by sheer volume of participants –
* 1,004 responses with total usable sample 695. Provides +/- 4% deviation.
* Satisfaction high 50.9% very satisfied, Satisfied 21.3%. Highest satisfaction in non aligned or boutique.
* Key concerns 1.Regualtory and Compliance support 2. Fees/ Licencing costs,3.Culture/work environment 4.Management/ Leadership 5.APL
Additionally Forte Dealer Solutions daily business is assisting practices to move to most appropriate licencing arrangements
Data on market break up from ASIC –
Dealer AR
Numbers total % of total
250+ 12312 50.60
50-249 5114 21.02
20-49 2204 9.06
5-19 2617 10.76
2-4 1638 6.73
1 446 1.83
TOTAL 24331 100
Plus additional data from IFA 2016 Survey with greater than 1,000 individuals
Small Dealers (1-4 AR) is 8.56% or 2,084 Advisers. Interesting.
get your facts right guys elders is made up of ex ANZ advisers like myself and totally run out of Adelaide I wouldn’t be there if they were insto
You may want to get your own facts right mate. From Elders FSG:
“Elders Financial Planning Pty Ltd, via a joint venture, is owned by Millennium 3 Financial Services Group Pty Ltd (M3 FSG) and Elders Rural Services Australia Ltd (Elders). M3FSG is ultimately owned by ANZ Banking Group. As a result Elders Financial Panning Pty Ltd is related to all companies within this group including OnePath Australia Ltd, which offers financial products and platforms to retail clients.”
If an adviser doesn’t understand that just because a practice isn’t advertised as insto doesn’t mean it’s not insto owned or controlled, then how are consumers expected to understand this? Elders, Charter, Magnitude, Shadforths, RI, Bridges, Securitor, Fin Wis, Count, Hillross etc are all insto.
It is about time the ACCC or ASIC took action to stop insto firms from using “independent sounding” brands to deceive the public. No-one reads the FSG fine print to discover underlying control and ownership of these firms. As the comment above shows, not even the advisers who work there do.
Nice opinion piece, no fact base but nice !! Definition of fleeing please?
The trend to self licensing and small pods of advisers will continue. Large dealer groups over the next five years I reckon will become more and more irrelevant. Soon the only advisers they’ll have will be start up advisers leaving the banks or wanting advisers wanting a start in self employed land and the rest of their customers will be advisers who are too close to selling and or have a poor compliance history. A mixed bag of advisers to say the least. Overall could the last fat dealer group head please close the door on their way out, and don’t forget to take the keys to the Porsche purchased with all that conflicted remuneration profited from advisers.
I think Mr Prendeville is a speculator at best. Were is his data facts coming from? There are pros and cons between institutional licensees and running an AFSL. Marketing business via this forum is unacceptable given no thorough research. Show us the numbers and then the article may have credibility. By the way numbers from a reputable source please.
Dave, Elders is an ANZ bank JV (according to the FSG) – so that would be aligned then. Also there is no real data cited for this article other than the writers opinion and some anecdotes.
here’s some data for ya mate https://www.ifa.com.au/news/17406-amp-sheds-adviser-numbers
These departing Advisers (which is old news now) didn’t leave AMP and then set up under “small, non-aligned” firms or get “their own AFSL” which was the proposition made in the article
The two most important things a dealergroup can do for their advisers is to protect their reputation and ensure the advisers have the tools to solve the clients problems
That’s a really good value proposition Rob. You should put that one on your website for clients of your advisers to read. Perhaps something like, “Our advisers are so clueless that we’re out their helping to protect their reputation, if you’re also clueless and like to take a punt with your clients money come and join our over bearing compliance regime in order to protect you from yourself and the other clueless advisers in our network.” The dealer group model is clearly broken.
spot on Steve I noticed a number of advisers are moving to the smaller groups and spoke with an Elders planner last week at an investment forum who was praising their business
Seems like the start of a monumental shift in adviser numbers
elders is insto!