IFAs less resistant to bank alignment
Despite conventional wisdom to the contrary, many independent financial planners are not ill-disposed towards linking to the dealer group services provided by the major banks, according to BT Select managing director Phil Butterworth.
In an exclusive interview with Money Management, Butterworth attributed BT Select's recent rapid growth to the willingness of financial planning practices to put aside some of the historic negative perceptions associated with alignment with the major banks.
Butterworth told Money Management that so far this year, BT Select had added 34 new financial planning practices to its service offering with combined funds under administration of between $2.2 billion and $2.4 billion.
As well, he claimed BT Select had a "pipeline of discussions with other good-sized practices", with his personal benchmark being the addition of 50 practices.
Butterworth said that ultimately the company was looking to cap its growth at around 100 to 120 practices over the next three years.
Questioned on the manner in which BT Select had sought to attract the additional practices, Butterworth asserted that the perceived turf war which was seen to have developed following the Commonwealth Bank's acquisition of Count Financial was at an end.
That perceived turf war saw claims that BT Select had offered "transition payments" of up to $1 million to some financial planning practices within Count Financial, while the Commonwealth Bank was said to have been equally generous in terms of offering "retention payments".
However, Butterworth said last week "that we're past all that and it is business as usual".
"We are just focused on promoting our business proposition," he said.
The business proposition has seen BT Select offering itself as not so much a dealer group but the provider of dealer group services, and this is the element which Butterworth claims has helped overcome traditional independent adviser resistance to aligning with the major banks.
He said that coming from the fundamentally non-aligned arena reflected in his previous position at DKN, he had expected a good deal of push-back and negativity with respect to independent planners accepting the BT/Westpac offering, but this had not proved to be the case.
"I have honestly not received one adverse comment about becoming bank-aligned," Butterworth said.
"They (planning groups) are not caught up in the whole bank-alignment issue, they are more interested in extracting the best value business proposition, knowing that they remain independent and can change providers if they are not satisfied," he said.
"It is not so much a question of being seen to be aligned with a major bank but, rather, whether they are getting good service that is reasonably priced," Butterworth said.
"So I understand that there has traditionally been a mindset about independence and bank alignment, but that does not seem to be the issue with younger planners," he said.
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