Lonsdale practices look for cost savings
|
|
A significant number of Lonsdale planning practices are restructuring their service and pricing models in an effort to drop the cost of advice, according to the chief executive of Lonsdale, Mario Modica.
An increasing number of practices under Lonsdale’s parent group, DKN, were also approaching the firm looking to restructure their businesses to eliminate trail commissions and rebates in light of the financial services reforms, Modica said.
“There are some firms [that] are reasonably reliant on trail commissions and rebates, and if they end up getting turned off, then those businesses face a significant reduction in revenue, and a reduction in the value of their business,” he said.
The restructure is part of a client segmentation program that was launched last year to Lonsdale practices. It is also available to DKN aligned firms.
The module allows practices to segment their client base around a range of factors, such as profitability, funds under management and fee generation.
“The module is flexible enough to be able to segment their client base on any number of parameters, which comes down to an individual practice. Once they segment their client base, they can start thinking [about] what service package to offer to those segments, and how much it costs to deliver those packages,” Modica said.
Modica said the restructure came down to the value of advice and providing better service to clients in a way that was still profitable.
“If you are getting paid for your service by trails or commissions or rebates, and that gets turned off, then all of a sudden your value proposition is zero,” he said.
Recommended for you
The strategic partnership with Oaktree Capital and AZ NGA is likely to pave the way for overseas players looking to enter the Australian financial advice market, according to experts.
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
Increasing revenue per client is a strategic priority for over half of financial advice businesses, a new report has found, with documented processes being a key way to achieving this.
The education provider has encouraged all financial advisers to avoid a “last-minute scramble” in meeting education requirements prior to the 31 December 2025 deadline.
