Glenhurst hunting for more numbers

Melbourne-based dealer group Glenhurst Corporation is expected to sign a joint venture with a significant accounting firm as part of its expansion drive.

Glenhurst chief executive officer Tony Kofkin would not reveal who the deal was with, saying only it was expected to be signed asMoney Managementwent to press.

The company is also looking to sign up more planning firms to join the group and is in discussion with a number in Sydney, he says.

“At present, we have seven planning firms, mainly from Melbourne and Brisbane, in the group and we are talking to several in Sydney,” Kofkin says.

“We don’t want more than 25 firms in the group and we are looking at firms with up to three proper authority holders.”

The expansion move comes as Glenhurst switches to a fee for service dealer group.

“We looked at switching to this type of service a while ago and it resulted in 80 per cent of our advisers leaving,” Kofkin says.

“We had always worked on the 80/20 rule (80 per cent of a business comes from 20 per cent of the advisers) and that was not very profitable. Since switching to fee for service, we have become profitable.”

Kofkin says many of the good planning firms in dealer groups were supporting the 80 per cent of non-performers and he thinks the new fee for service method will reward them better.

“Rather than work on split commissions, we will charge a fee for service, which is 100 per cent rebated. That way everybody is paying the same fee for the same service,” he says.

Planning firms can operate under their own banner if they have their own dealers licence. Those that lose their dealers licence when they leave a dealer group can use the Glenhurst licence.

The company now has 34 proper authority holders with half of them being life brokers and about $300 million of funds under advice.