Daly questions insto dealer groups
The managing director of Australian Financial Services, Peter Daly, has accused some institutionally owned dealer groups of not implementing a considered approach to their services to financial planning practices, and questioned whether they were creating yearly losses for their parents as a result.
Daly said that reputedly some institutional dealer groups were bringing in a profit of below 10 per cent per year, and their parent company was using platforms and other services to offset the loss to profits.
“How many of those dealer groups are profitable? And how large is their profit?” Daly asked.
A dealer groups’ profitability ratio should be at a minimum of 30 per cent, Daly said.
These institutionally owned dealer groups have a “scattergun” approach to services, “throwing them out there and hoping something will stick”, Daly said.
Services needed to be analysed very carefully before a dealer groups decides it will be an advantage for a particular planning practice, Daly said.
“My observations are that if you look at the ratio of staff to advisers [in some dealer groups], they are very high, and I’d want to know what everyone was doing,” Daly said.
“They have got all these services, but are they relevant, and are the people relevant [for those services], and I genuinely find that these institutions have these masses of services and masses of resources, but it is questionable whether they are accountable,” he said.
Recommended for you
Advice firms are increasing their base salaries by as much as $50k to attract talent, particularly seeking advisers with a portable book of clients, but equity offerings remain off the table.
MLC Expand has appointed retirement specialist Andrew Long to work with advisers and licensees and drive growth for its recently launched retirement solution.
Despite banks largely having exited the industry, advisers under institutional licensees are least likely to switch while 26 advisers have been appointed to a licensee more than 10 times.
Insignia Financial has shared a progress update on the acquisition by US private equity firm CC Capital as well as the departure of a long-standing director.
