AustChoice breaks $500 million barrier

AustChoice Financial Services is predicting to hit the $1 billion of funds under management barrier this financial year, says managing director Roger Gumley.

AustChoice Financial Services is predicting to hit the $1 billion of funds under management barrier this financial year, says managing director Roger Gumley.

The company has just reported breaking the $500 million barrier last month. This has come from the 52 adviser shareholders that make up the financial co-operative.

“AustChoice’s success confirms recently published research predicting the strong trend of financial planners breaking away from institution-controlled dealer groups and forming themselves into co-operative associations,” Gumley says.

The co-op is 80 per cent owned by its adviser groups, with advisers putting almost all of the funds under management into the AustChoice master trust, which is administered by SMF Funds Management.

To expand the product range, Gumley says the co-op has added Challenger life annuities and the BT Portfolio Services wrap account to the line-up.

“Our relationship with BT will now allow us to look at the global trends in back office operations and incorporate those ideas into our operations,” Gumley says.

Part of the key to gain access to wider services is achieving scale, says Gumley.

“Independent financial planners, through economies of scale achieved by operations such as AustChoice, will increasingly determine the style, pricing and distribution of managed investment products and services,” he says. “Traditionally this has been the domain of the institutions.”

The co-op is expected to make a pre-tax profit of $2.1 million in the 2000 financial year, he says, and this is expected to rise to $4.1 million by June, 2001. It is still the intention of AustChoice to float by August 2002, Gumley confirmed.