Insignia adviser numbers thin amid model revamp
Insignia announced it has changed the naming conventions used to describe its adviser channels, now divided into professional services, self-employed, and self-licensed.
In its quarterly update for the three months to 31 March, the firm said the decision had been taken to improve differentiation between the various channels.
Professional services comprised Shadforth Financial Group and Bridge, while advice services provided B2B “advice as a service” to self-employed advisers operating under an Insignia AFSL and self-licensed ones operating under their own licence.
Revenue through professional services was derived from fees paid directly by advised clients, and the advice services division saw advice firms pay fixed fees based on the services they elect, charged at a practice level with additional incremental revenue per authorised representative.
Under the new three-channel mode, as at 31 March, 242 advisers were directly employed by Insignia via the professional services division (16.3 per cent), with 750 self-employed (56.3 per cent) and 491 self-licensed (33.1 per cent).
The adviser network totalled 1,483 as at 31 March 2023, down 12 per cent from 1,682 in 3Q22 and 2.7 per cent over the quarter.
Losses in the advice business had largely been seen in the advice services channel, Insignia said.
Fund movements
Positive market movements helped offset a $26 billion contraction in the total value of funds managed and administered by the group.
Funds under management and administration (FUMA) totalled $291.2 billion as at 31 March 2023.
This was down 8.1 per cent on the previous corresponding period ($317 billion).
Platform FUA fell 6.6 per cent ($14.7 billion), from $220.2 billion in the third quarter of 2022 to $205.5 billion, while total FUM slipped 11.5 per cent ($11.2 billion), from $96.9 billion to $85.7 billion.
However, when compared to the previous quarter, total FUMA increased 2.2 per cent ($6.2 billion) from $285.1 billion.
Positive market movements contributed $5.3 billion to the group’s quarterly platform FUA growth, offset by $453 million in net outflows and $706 million in pension payments.
The advised platform grew to $107.2 billion, while the workplace and personal platforms grew to $53 billion and $33 billion, respectively.
FUM also improved over the three months to 31 March 2023, rising 3 per cent ($2 billion) to $85.7 billion.
FUM growth over the quarter was underpinned by $1.1 billion in net inflows and positive market movements of $857 million.
The direct capabilities portfolio drove most of the growth in net inflows ($902 million), while the multi-asset portfolio was the exclusive beneficiary of positive market movements over the quarter ($884 million).
Reflecting on the group’s performance over the first three months of 2023, Insignia Financial CEO Renato Mota attributed the improvement to the execution of the business strategy and the “stabilisation of investment markets”.
“We have achieved net inflows of $604 million on a continuing basis so far this financial year,” he said.
“This further highlights the benefits of our diversified business model, with positive flows in workplace, retail asset management and institutional asset management offsetting net outflows from advised platforms, which have been impacted by market volatility and industry weakness.”
Looking ahead, Mota said the group would focus on the “disciplined execution of strategic initiatives and opportunities” amid “uncertain investment market conditions”.
AUTHOR
Charbel Kadib
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IOOF... oops Insignia are still determined to try and return to what was once known as the Sole or Tied Agent model. A staff member leaves the part of the business that services self-employed, they are not allowed to be replaced. It's all about trying to force self-employed advisers to become employed advisers. Their CEO talks about this with pride. Anybody else find this murky and a backwards step for the industry?