Boutiques sign windfall deal

remuneration financial planning practices colonial first state chief executive money management

21 March 2005
| By Rebecca Evans |

Small financial planning practices could be between $20,000 and $40,000 a year better off, after the peak association for boutique advisers signed an exclusive deal with Colonial First State’s FirstChoice master trust.

Commercial members of the Association of Independently Owned Financial Planners (AIOFP) will get 80 basis points in commission — up 20 basis points on the usual 60 — for funds they place with FirstChoice under the deal, which was sealed late last week.

AIOFP has been in discussions with FirstChoice since late last year after its members agreed to negotiate with fund managers and platform providers as a collective in the hope of scoring higher commission rates, which are usually only offered as a special incentive to larger dealers.

AIOFP has close to 100 member practices, accounting for 1,100 advisers and $9 billion under management.

The average member of the association has between $10 million and $20 million invested through FirstChoice, meaning the deal could add between $20,000 and $40,000 a year to their bottom line.

AIOFP chief executive Peter Johnson told Money Management up to six other platform providers were interested in offering boutique advisers a similar deal.

“This deal enables boutique planners to receive the same revenue and remuneration as the big consolidated practices receive,” Johnson said.

The deal is also understood to be a first for Colonial, which will allow small practices to offer a co-branded AIOFP / FirstChoice version of the platform — the first time Colonial has permitted a badged version of FirstChoice.

Colonial general manager of retail distribution Richard Nunn said: “The association has a significant presence in the market and it is a growing one. We see the boutique independent dealer group sector being an important opportunity for us.”

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