Aviva offers financial support to new adviser groups
By John Wilkinson
Aviva is offering financial support to dealer groups seeking to gain their own Australian Financial Services Licence (AFSL) and states it has now helped secure nearly 70 AFSLs for groups of advisers to set up their own practices.
The groups, which total 67 in number, have ranged in size from one to six advisers with more than two-thirds coming from financial institutions, says Aviva chief executive Allan Griffiths.
“When we started the strategy of helping advisers get their licences, we looked at achieving 30 in the first year, but we have helped 67 to date and we are continuing to talk to a number of advisers who are looking to leave their dealer groups,” Griffiths says.
He says the financial support will include loans to new dealers but Aviva will not be using them to take an equity stake in the advisory groups.
“We will not be taking equity stakes in the groups and we have put no sales targets on using Navigator or other products. We are trying to position ourselves as the silent partner which is why we haven’t taken equity stakes,” he says.
Aviva does have a 10 per cent equity stake in PIS, but this is an historic deal that was created a number of years ago. PIS, however, is a major user of Navigator.
So far the largest beneficiary of the arrangement with Aviva has been Meritum, which now has 91 proper authority holders in 31 practices, after gaining its licence through Aviva just under three months ago.
Two Aviva staff members are on the Meritum board and Aviva has put $1.7 million of working capital into the dealer in the form of a non-recourse loan that has to be paid back in two years.
“We have also given Meritum a $3.3 million overdraft facility to use if Financial Wisdom holds up payment of commission for six months, which they are entitled to do. When the commissions are paid, they would go to reducing the overdraft if it had been used,” he says.
Griffiths says the move to offer financial assistance and support in gaining an AFSL was part of an Aviva strategy to become more closely aligned with non-aligned advisers.
“We are focusing on the human part of financial services whereas the institutions are focusing on the processing part of the business.”
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