Anticipating the year ahead for 5 major advice players

With the FY24 reporting season behind us, five major financial advice licensees are looking to achieve growth either through inorganic activity or internal expansion.

Over the past month, Australia’s five largest licensees announced their 2023–24 financial results: AMP, Insignia Financial, Count, WT Financial Group and Centrepoint Alliance.

Money Management takes a look at each of the firms’ major announcements and growth plans in the year ahead for its advisers and practices.

AMP

The most notable announcement out of the FY24 licensee results season is AMP’s decision to sell its advice licensees and self-licensed offering Jigsaw for $10.2 million to Entireti. Meanwhile, AZ NGA will acquire minority stakes held by AMP in 16 practices for $82.2 million.

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In its results for the first half of 2024, the firm said underlying net profit after tax (NPAT) was $118 million, up 5.4 per cent from $112 million a year ago.

The advice arm reported an underlying net loss of $15 million, which was a 40 per cent improvement on losses a year ago of $25 million. It said adviser exits had “largely stabilised and there is a renewed focus on retention and acquisition of practices”. Revenue per practice increased by 11.6 per cent from a year ago.

While AMP will retain a 30 per cent stake in its licensee business named NewCo – which will be rebranded in due course – in order to maintain stability, its main focus following the exit of advice will now be on the wealth space, its North platform, bank and default superannuation.

Insignia

Over at Insignia, previously Australia’s second largest licensee behind AMP, the company reported a statutory NPAT of $185 million, but an underlying NPAT of $217 million.

Rhombus Advisory, Insignia’s separate partnership model focused on self-employed licensees, formally separated from the firm on 1 July 2024. Insignia retains 37 per cent of equity, but it is expected to be deconsolidated from the group in FY25.

According to Scott Hartley, chief executive of Insignia, the company is focused on accelerating its cost optimisation program and simplifying the business.

He said in August: “Insignia Financial’s strong, scaleable positions across the wealth management value chain create the opportunity to deliver long-term sustainable growth for our shareholders and improved outcomes for customers.”

Count

In its FY24 results, Count announced that its underlying NPAT increased to $5.75 million, up 68 per cent from $3.42 million in FY23.

Moreover, the licensee reported $34.2 billion in funds under advice (FUA), which is up 104 per cent from $16.8 billion in FY23.

Off the back of its “transformational acquisition” of Diverger in March 2024 and other M&A activities, Count will now be shifting focus to “increasing returns on already invested capital”.

“Investment activity in accretive acquisitions will continue, along with driving higher margins in our existing businesses,” Count chair Ray Kellerman said in August.

WT Financial

Competitor WT Financial Group saw an underlying NPBT of $4.4 million for FY24, which was up 51.4 per cent from $2.9 million in FY23. The company’s underlying business operations recorded a 15.3 per cent increase in revenue to $185.1 million, up from $160.5 million in FY23.

Speaking on a shareholder webinar, managing director Keith Cullen said the licensee had “come out the other side” following a four-year period of M&A activity which saw it acquire Sentry, Synchron and Millennium3. The firm is now looking inward at organic growth and how its practices can enact their own M&A, he explained.

“We want to help them with corporatisation initiatives, we will be playing a key role in helping facilitate M&A and succession planning among our practices. We really see a push towards this corporatisation over the next 5–10 years, and we are very excited about playing a leading role in that,” Cullen said.

Centrepoint

Finally, licensee Centrepoint announced a net profit after tax was $7.8 million, an increase of $1.5 million on the previous year, while net revenue increased to $36.1 million.

Looking ahead at FY25, the company is eyeing organic growth from advisers looking to switch licensees over the next 12–18 months, with 6–7 per cent of advisers switching each year, equating to around 1,000 advisers.

“We think we are really well placed with the acquisitions going on and the disruption in the market,” chief executive John Shuttleworth said. “We think it will be a lucrative recruitment market for the next 12–18 months and we are very focused on growing.”