Breakaways run with success

A number of new entrants in this year’s Top 100 survey carry the label of breakaway group. While they may not dominate the rankings, the groups in their own right carry some weight and presence in the industry, and, compared with some other groups, a high degree of success.

Breakaway groups hitting the list for the first time are Premium Accounting Group, at number 43 with 50 planners, and Avenue Capital Management, making its debut appearance at number 52 with 36 planners.

These two groups are examples of what can be achieved by experienced individuals who leave the ranks of large dealers and set out to make it on their own. They also follow in the footsteps of other breakaways such as Matrix, adding 16 new planners since last year, and moving into 42nd place, up from 54.

These groups are used to ruffling a few feathers. For example, former Count Wealth Accountants (now Count Financial) financial executive Lewis Waters caused a stir in the industry last November when he departed the dealer group and set out on his own. Taking a number of his Count colleagues with him, Waters successfully established Premium as an accountant-based dealer group spin off.

Nearly one year on, Premium is what you could call a success story. It currently has close to $1 billion in funds under advice and services about 6,000 clients.

Since its inception, Premium has added to the initial 10 firms, this year signing six new groups to take the total number of member firms to 16, with 50 proper authority holders.

Premium managing director Helen Bridgewood cites a number of reasons for the success of Premium as a breakaway group.

“The key thing is all our member firms are committed to financial planning. We don’t have the situation where only 80 per cent of firms are writing business,” Bridgewood says.

Being a breakaway from a large dealer group, the founders of Premium had definite ideas on what it was they wanted out of their new group. So the Premium structure means several restrictions on groups wishing to join. All potential member firms must have at least $20 million funds under management and either be, or have an association with, an authorised accountancy practice.

Coming in around the half way mark of the Top 100 list with close to $700 million funds under advice is Avenue Capital Manage-ment (ACM). Avenue was established early on in the year when 13 practices under Advisor Investment Services (AIS) split from that dealer group to set out on their own.

Avenue is headed up by former principal of AIS’ North Sydney office, John Moore.

For the former AIS member firms, the decision to depart came from the expected changes in the dealer group’s new structure when plans to merge with Bleakleys and form Partnership Planning were announced by Mercantile Mutual’s planning division, ING Financial Planning.

Eight months on, Moore says the advantages for Avenue in its independent structure and as a breakaway are clear.

“We have more control over the direction of the group and the facilities we can provide to our member branches in-house,” he says.

Since its formation, Avenue has grown by four branches, taking its total to 17. Moore says the group plans to remain a boutique planning group with expansion limited through the regional branches.

Rainmaker Information managing director Chris Page, one of the researchers behind the Top 100 dealer’s survey, says the nature of the industry is conducive to breakaway groups forming. As bigger groups continue to swallow up smaller structures, some of these will act to avoid such takeovers and will pull away to form boutiques.

“At the same time of the heavy concentration of larger groups, there is a boutique industry growing. People cut their teeth at the larger groups and then move on and we may see the emergence of a highly fragmented industry in terms of the number of players, and how they motivate and keep planners on board. It will be interesting to see how that pans out over the years.”