Boutique dealers are banding together
The recentlylaunched Boutique Financial Planning Principal Group (BFPPG) has almost doubled its membership in its first month of existence since launching at the end of May.
BFPPG president Bruce Baker says the group, which was started up with nine principal members from Queensland boutique dealer groups, has had an overwhelming response since officially launching.
“We have 15 businesses represented by our group now, while a lot more dealer groups have made enquiries or are considering joining,” Baker says.
He says there is also representation from outside of Queensland, notably with new members from South Australia and Western Australia.
“There are a lot of people working in small dealer groups who feel that they are under-represented,” Baker says.
In the month since officially launching, the group has made representations to the joint committee hearings on the Financial Services Reform Act, as well as meeting with Australian Securities and Investments Commission (ASIC) financial services regulation licensing director Pauline Vamos about compliance issues affecting boutique dealers.
Baker describes the meetings with Vamos as very productive, and was pleased that a line of communication had been opened up with ASIC to resolve issues of compliance.
“We were assured by Pauline that ASIC saw a place for small dealers, and it was clear that she understands the attributes small dealers bring to market.”
In the short-term, there are two key issues BFPPG will tackle, which will be raised in its meeting of members and non-members in the week after the Financial Planning Association’s (FPA) Brisbane chapter meeting scheduled for the end of July.
The first is the issue of professional indemnity and how best to get the insurance industry to properly understand and assess boutique dealer groups.
Baker says his group wants to hear from other dealer groups on this issue, and proposes to find brokers with the capacity to underwrite policies of the BFPPG members.
“We want to find two brokers nationally who understand what our businesses are about and who can present our cases to the insurers,” Baker says.
“What we hope to be able to do is present members with a shortlist of brokers and direct members to them.
“We believe we can get better results that way,” he says.
Baker says there does not seem to be any rhyme or reason about how insurers underwrite boutique dealer group policies, with various dealer groups having vastly different premiums despite having a similar annual turnover.
The second matter the group wants to address is to have a template to guide how best to put a boutique dealer group’s case to brokers and underwriters to identify the real risks involved in providing insurance.
According to Baker, the group will be taking up many of the policies already championed by the FPA on boutique dealer groups’ behalf.
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