Merged practices struggle to resolve conflicts
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.
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
