Hunt for planners over as instos look inhouse
Bank-owned dealer groups have ceased their hunt for planners from other financial planning groups and have turned their attention in-house to develop their tied advice channels.
As a result the recent spate of transition payments has ended and business units tasked with attracting established planners and practices have been shut down, according to Pinnacle Practice founder Anne Fuchs.
However Fuchs said this push was approaching a tied-agency model and would continue to support buyer of last resort (BOLR) exit strategies.
"These groups have picked out what they wanted and are focusing on their internal channels now. Most of the activity that I am seeing is about growing those back channels, with lip service being paid to third party advisers," Fuchs said.
"It is a return to a tied-agency model because the Government wants it this way, so that there is adequate recourse in the event of an advice failure.
"As a result of this, transition payments have stopped to third party advisers — but BOLR is still being used to purchase practices within networks and to pass them on to younger advisers."
Fuchs said the recent lack of noise around grandfathering is not necessarily a sign the issue has gone dead. Assurances were being given behind the scenes that grandfathering would be resolved.
"Before the election people were resigned that grandfathering was here to stay, but now they are more confident there will be a change," Fuchs said.
However, the timeframe in which this would take place was still in question, and Fuchs said there was no imperative for the Federal Government to act.
"If grandfathering is not dealt with quickly the morale of planning groups with significant infrastructure and scale is likely to plummet in 2014," Fuchs said.
AUTHOR
Jason Spits
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