Recent changes within the financial services industry have generated a climate in which advice practices are reconsidering their licensee choice and making moves to new dealer groups.
We want to know what you are thinking and where your practice is currently positioned. Our latest adviser poll asks:
Is your advice practice considering changing licensees within the next 12 months?
Key events in recent times that have helped to create this climate of change include:
- Future of Financial Advice (FoFA) reform proposals
- Industry consolidation
The proposed FoFA reforms appear to have many advice practices questioning their current licensee arrangements, whether they can afford to operate under present circumstances and/or whether they would experience a more favourable service proposition elsewhere. Examples include:
- The perceived heavy administration and financial burdens associated by many advice practices with opt-in proposals
- The removal of most volume bonus-related income streams for new business from 1 July 2012
- The required restructuring of many advice practices from commission-based to fee-based business structures
In addition to FoFA, the industry has also seen significant consolidation over recent times, with the effective disappearance of ING and Aviva from the Australian financial services landscape and the eventual acquisition of AXA by AMP.
AMP’s acquisition of AXA followed an unsuccessful bid by MLC, whose bid was blocked by the Australian Competition and Consumer Commission. Since then, there has developed a sometimes intense lobbying campaign by both organisations to win the hearts and minds of advice practices both within MLC and AMP-owned dealer groups as well as practices operating under other licensee banners.
The outcome of this lobbying has seen AXA/AMP practices switch to MLC licensees and vice versa. We understand this campaign continues and that a number of advice practices are presently considering their options.
Are you also considering your options? Is your present licensee delivering the services and environment you need to successfully build the value of your business? Are there issues other than those mentioned here that are causing you to consider licensee alternatives? Have you already made the move?
Let us know what you think…
I am happy with my current licensee and have no plans to move because I know that they (1) are lobbying those players who seek to control what we do and (2) are growing because of their honest approach to their adviser’s.
I am concerned however, that every time there are any changes in our industry, it costs the Licensee’s more to administer their lot and in one way or another, adviser’s costs rise.
So,given we waste so much time on proposed changes, Govt interference and compliance issues these days, leaving little time to write new business,how do we offset the extra costs now and those coming?
Push our clients to pay more?….yeah, I wish
Go through the hassle of moving to a different Licensee and hope they can help us do it smarter? ……I can’t be bothered, because I am not sure I trust the motives of the big end players.
In fact, this consolidation process leads me to think we are heading back to the days of being “tied” advisers and once you are in, your approved list will shrink …..probably not what our regulators really want and certainly not my preferred option
So, I will stick with my current Licensee, supporting them , knowing they support me and encourage them to get stuck into those who make no sense.
Hopefully, we can all get back to giving quality advice and building profitable business’s.
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