Dealer services model extended for AAP advisers
Licensees operating under Associated Advisory Practices (AAP) dealer services model will be offered succession planning, acquisition funding and client book purchasing support as part of a suite of new practice offerings released by parent group, Centrepoint Alliance.
The offerings were announced to planners within the group at its national conference by Centrepoint Alliance managing director John de Zwart.
He stated the group had arranged preferential terms for loans to planners from three banks to assist them in the acquisition of practices or client book segments and would provide guarantees to the banks where loans are related to book purchases.
De Zwart said there were still high numbers of practice acquisitions to take place and estimated there are more than 2000 planning practices across the sector that were unsustainable in the long-term.
"These businesses need $500,000 or more in revenue to survive and to provide the necessary front office, back office, compliance, administration, staffing and marketing resources needed to provide financial advice in the current environment."
He said the book purchasing support would create a market where AAP planners can either acquire or sell clients they may no longer be able to service and to create an exit strategy for advisers moving out of the profession.
"Book sales will use a market based value model with prices based on the location and types of clients with each client assessed and their value aggregated to provide a purchase price," he said.
The book purchase scheme would also be offered to new planners to the AAP group who wish to open their own practice under the licence and were looking to seed their business.
Planners looking to leave their businesses would be given succession planning support after the completion of a pilot scheme developed in Seaview Consulting AAP planners would also be able to access para planning services designed for the group after the completion of a trial program with de Zwart stating this move was a response to institutions taking over third party para planning services.
The packages would also be made available to planners within Professional Investment Services.
The announcements follow moves by Centrepoint earlier this year to secure professional indemnity insurance for financial planners in the group which was secured through a Lloyd's syndicate.
Jason Spits travelled to the 2014 Associated Advisory Practices conference in Queenstown, New Zealand as a guest of AAP.
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Jason Spits
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