Advisers cautioned on over-promising dealer groups
Financial advisers looking to join a dealer group need to make sure those groups can and will deliver on their promises, according to My Dealer Group founder Anne Fuchs.
Fuchs, who is in the business of matching advisers with dealer groups, said she had often seen licensees promise the world to incoming advisers at the recruitment stage — only to dramatically under-deliver once the contract is signed.
"Promises of referral sources, lead generation and acquisition opportunities are the most common, with some dealer groups using these as lures to encourage advisers under the age of 45, who really need to grow their businesses," Fuchs said.
"Although the offer of these opportunities is often on the table at recruitment, advisers won't have access to material supporting the offer before they buy a ticket to the game — ie, sign the contract."
Before signing any agreement, advisers need to make sure that what they are promised would actually be delivered, Fuchs said.
Requesting meetings with prospective referral sources and a full review of any books of clients the dealer groups would offer for purchase could be some of the ways to avoid disappointment, she added.
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
