ClearView aims for flat fee advice approach
Major insurer ClearView has begun the process of changing the commercial dynamics of its financial advice businesses with the aim of having them become profitable standalone structures utilising flat fee structures.
ClearView managing director, Simon Swanson outlined the company’s objective to Money Management at the same time as announcing a “disappointing” half to the Australian Securities Exchange (ASX) entailing 23% decline in underlying net profit after tax to $13.1 million largely owed difficulties around income protection products.
The company reported a 27% decline in net profit after tax for its life insurance business to $7.5 million, a 19% decline in NPAT to $1.7 million for its wealth management business and a more modest decline to underlying NPAT for its financial advice business to $600,000.
However, in doing so the company pointed to “turning financial advice into a profitable standalone segment over time by repositioning and repricing the dealer group core offering of Matrix Financial Planning and ClearView Financial Advice and rolling out LaVista Licensee Solutions to help create a sustainable model.
Speaking to Money Management, Swanson said ClearView believed it was clear that advisers needed to move to flat fee arrangements and that the days of asset-based fees or percentage-based fees were over.
He said that was the underlying premise of turning the company’s dealer groups into profit centres – a process that could take up to two years.
At the same time, Swanson also pointed to ClearView undertaking a major project to seek a modern replacement solution for its wrap technology noting that there were lessons to be learned from the industry superannuation funds in terms on simplicity and clarity of offering.
Recommended for you
Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand.
The third quarter of 2024 saw the first positive increase in adviser numbers for 12 months, according to the latest quarterly Musical Chairs report, with new entrants overwhelmingly choosing to join privately owned firms.
As more advisers review their fee structures, Business Health has shared six steps to calculating the price to deliver financial advice services in a profitable yet suitable way.
ASIC’s Sarah Court has confirmed the regulator is carrying out systematic work on providers of unlicensed advice but admits it is a case of “whack-a-mole” when it comes to disciplining them.
