Perceptions drive success

Macquarie Equities has emerged as the Money Management/ CoreData non-bank Dealer Group of the Year for 2009, while Commonwealth Financial Planning has been named bank Dealer Group of the Year.

The two winning dealer groups were assessed utilising a methodology that combines the findings of Money Management’s Top 100 Dealer Group survey and CoreData’s ATRACS Index.

The methodology is designed to take account of not only the number of planners within each dealer group, but the consequent ratio of funds under advice together with the metrics contained within CoreData’s ATRACS Index, which measures factors such as how dealer groups are perceived both internally and externally.

The inaugural Money Management/CoreData Dealer Group of the Year awards were won by ABN Amro and National Australia Bank in 2008.

It says something for the awards methodology and the business models utilised by the winning dealer groups that both ABN Amro and National Australia Bank Financial Planning finished second in 2009.

It is also instructive in the non-bank sector to note that just as ABN Amro’s success in 2008 was attributed to the benefits of combining a full stock-broking and financial planning service, the same appeared to be the case with this year’s win by Macquarie Equities.

Importantly for the dealer group winners, one of the most important factors in their success in 2009 was the degree to which they were viewed positively both internally (by their own personnel) and externally by the public.

The internal and external measures, as tracked by the ATRACS Index proved decisive when taken together with the level of funds under advice per planner. Indeed, for the second year in a row ABN Amro topped the data when it came to internal perceptions. It ultimately lost out to Macquarie Equities on the basis of external perceptions and funds under advice.

Count Financial, which utilises a very different business model to either ABN Amro or Macquarie Equities, finished third on the basis of both strong internal and external perceptions and funds under advice.

Professional Investment Services, which finished fourth in the awards, appeared to lose some headway as a result of a lower external perception measure and lower funds under advice than last year.

Where the leading bank dealer groups were concerned, Commonwealth Financial Planning edged National Australia Bank Financial Planning out of its leadership position on the basis of stronger internal perceptions and funds under advice.

Westpac Financial Planning finished third and lost out on the basis of poor internal perceptions.

Commenting on the results, CoreData’s Craig Phillips agreed the winners had been determined in large part by the manner in which both internal and external perceptions were in alignment.

“This year there are both interesting alignments and misalignments of adviser perception and reality,” he said.

“Some groups, for example Macquarie, Count and GWM Adviser Services, are ranked more or less the same from both an internal (reality) perspective and an external (perception) point of view indicating a close alignment between how the market sees these groups and the respective advisers of those groups.

“For others — Financial Wisdom, AXA, ABN Amro, AFS and Lonsdale, for example — the market has misconceptions of these businesses compared to the more positive outlook of the advisers working through these groups,” Phillips said.

“The decisions planners make to remain with a certain group or join another firm are often driven by both factual triggers and perceived strengths/weaknesses of other businesses in the market.

“It is therefore vitally important, given the role that perception plays in decision making, that licensees provide a true account of life within their networks to advisers so that both parties are satisfied post any transition,” he said.