Merged practices struggle to resolve conflicts

dealer-groups/mergers-and-acquisitions/FOFA/financial-planning/director/

1 March 2013
| By Staff |
image
image
expand image

The number of merged practices deciding to end their relationships will continue to increase in the months ahead due to the lack of clear conflict resolution arrangements, according to Seaview Consulting director David Fotheringham.

Fotheringham said the firm had became aware of five practice partnership arrangements across the financial planning and funds management space in dispute over the future direction of the businesses last year.

With some financial services businesses looking for exits in the face of increased operational costs and compliance obligations, Fotheringham said the process becomes that much more difficult when it involves two or more parties.

"It's just like a marriage — there's good intentions when you start out but five years on circumstances change and you need to look forward and ask what's the best proposition to go down," he said.

He said in a low growth environment, the ability of financial practitioners to manage a good business was as vital as being a good technical adviser.

"That's what's triggering the troubles, because one or both parties are simply not getting enough out of it given the effort they're putting into it," he said.

Organisations need to ensure their exit provisions have a clear process for conflict resolution as well as dissolution should the business partnership disintegrate, Fotheringham said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 4 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

5 months ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

2 weeks 1 day ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 6 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 4 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND