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
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments for investments.
Inefficient data processes and systems mean advisers are spending over half of their time on product implementation and administration at the expense of clients, according to research.
With the regulator announcing its enforcement focus for 2025 last week, law firm Hall & Wilcox examines the areas which have dropped down the list in priority for the regulator.
