PIS considers new model

insurance financial advisers national australia bank PIS risk management investment advice

8 July 2009
| By Lucinda Beaman |
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Australia’s biggest dealer group is considering restructuring its 1,400-plus adviser force into separate licences in what managing director Grahame Evans has acknowledged is, in part, a risk management issue.

Evans said the group is considering segmenting its advisory base, with the potential for its advisers to operate under up to three separate licences and brands. He said the reasons behind a potential restructure are twofold.

“When I originally looked at this I looked at it from a point of view of risk management and de-risking part of the business,” Evans said.

“But as I went more and more into it I saw the other part of the equation, which were the benefits of separate branding.”

Evans said the “divergence that exists now between our top planners and our not-so-top planners is quite wide”.

He said no firm decision had been made regarding a potential restructure, or the potential lines of segmentation that may be used.

If the group did decide to restructure, Evans said it would benefit from having different value proposition models.

He said there are potential benefits in segmenting advisers within one licence as well as into different licences.

PIS acquired the licence for IFMA Investment Services from Aviva in 2000. Under that licence is an investment advice business as well an insurance advice business — Insurance and Finance Managers of Australia. Evans said the licence is not currently in use and the group would not seek to revive it under that guise. While he did have names prepared for new licences, Evans would not disclose them.

PIS management met with 80 of the group’s top advisers and accountants, many of whom are also shareholders in the group, to discuss various strategic and operational issues in Brisbane on June 1.

The group also discussed changes to the management team of PIS, with the group now recruiting for general managers to head up the areas of advice, product and alliances, and services.

PIS founder Robbie Bennetts owns around 12 per cent of the group, Evans said. Aviva continues to hold a 23 per cent shareholding, with National Australia Bank choosing not to acquire a stake in the PIS business as part of its purchase of some of Aviva’s wealth management operations last month.

But Evans said it was his “understanding that NAB/MLC [is] still interested in PIS”.

“They would like to know a fair bit more about PIS,” he said.

“It’s a ‘wait-and-see’ issue.”

The remaining shareholdings in the group are owned by around 900 shareholders, the majority of whom are staff, accountants and financial advisers associated with the group.

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