Adviser Feedback 30/03 – Do you have a franchising agreement with advisers?

"No, but we have a dealership agreement with planners which sets out business between us as the dealer group and our proper authority holders.

"We have operating manuals and systems for both parties which deal with the conduct of business. This has been developed as the result of many years of life assurance agents within our network moving into a dealer group and proper authority relationship.

"We have adopted protocols which work but they need to be seen in light of the CLERP changes. Under the existing licensing arrangements, a license is issued by ASIC between the dealer and proper authority. The intent and outworkings are similar to a franchise but they are not the same.

"CLERP is playing catchup with the industry in this respect, and the way the industry is heading the development of the financial planning model demands this move.

Creating minimum levels of quality builds a base but competitive spirit drives that upwards which is a benefit for clients and industry practices as a whole.

For us it was previously a situation where planners where an agent of the product where now they are advisers for the advice house."

AXA Australia national dealership manager Mark Birrell

"No, for a number of reasons include some that are historical but the main one is the type of planner we are seeking.

"The two non-franchise groups under my management cater for different parts of the industry with AIS looking to the non-franchise based planners while Bleakleys deals with accountants in financial planning," Mc Master says.

"The AIS relationship is one of out-sourcing services to financial planners and as such we have to live as a dealer on our service merits. If we don't live up to our agreements based on that planners can terminate the deal and go elsewhere. It is a non territorial, fluid arrangement."

Adviser Investment Service and Bleakleys chief executive officer Wes McMaster

"We don't. have a franchising arrangement, we are a co-operative firm.

There is probably some similar principles with our firm and with the arrangement though.

A franchise is dominated by an agreement, our structure is not the same, we have joint decisions with member firms and member groups.

We aren't a franchise in the pure sense. We have evolved, but have some similarities. Franchise agreement would come down to client ownership and that could be an issue, also the costs of overheads expenses.

Most dealerships have their own wrap accounts and its hard to have a restrictive franchise agreement.

In a franchise agreement the major goals are really to create a consistent client experience."

Tony Madden

Director of member firm practice development.

Associated Planners, Financial Services.