Planner numbers back on the rise

The 2006-07 MoneyManagement Top 100 dealer group survey has revealed an increase in adviser numbers over the past 12 months in contrast to the stagnant growth experienced during the 2005-06 period.

The total number of authorised representatives operating under the auspices of the top 100 dealer groups jumped by 1,230 from the 14,022, reported in last year’s survey to 15,252 in 2006-07.

While the overall number of financial advisers rose, the ranking of the top three dealer groups determined by this criterion did not change.

Professional InvestmentServices (PIS) held sway as the largest dealer group in the country with 1,444 authorised representatives, followed by AMP FinancialPlanning (AMPFP) and Count Financial with 1,222 and 885 authorised representatives respectively.

PIS Group chief executive Robbie Bennetts believes being acknowledged as Australia’s largest financial advisory dealer group has its advantages, particularly when it comes to gaining a presence in overseas markets.

“It is very prestigious to be able to say you’re the largest in the country. It’s actually been very helpful for this group when we’ve gone to offshore markets, because they do see us as the largest,” Bennetts said.

He did, however, recognise that the number one mantle brought certain responsibilities with it.

“We work very, very hard to make sure we’re always a very responsible company in terms of what we’re doing out there. Nothing makes anybody bullet proof, but we spend an awful lot of money on making sure we have a very strong legal and compliance team and that our processes are very, very good,” Bennetts said.

AMPFP managing director Michael Guggenheimer admitted that the overall size of his dealer group is important, but said where the organisation is ranked is less important.

“Strategically, I think having breadth in our distribution resources is very, very important, but whether that’s number one or number two or three, I don’t know if we’re fixated about the finishing positions. It’s more about having the appropriate reach in our distribution to, in turn, be able to provide advice to more clients in the marketplace,” he explained.

Count Financial chairman Barry Lambert provided a contrasting view, claiming the total number of authorised representatives in his group was not very important.

“Size is not the important thing from our point of view. We’re more interested in quality rather than quantity,” he said.

The results of the study also showed PIS consolidated its position as the largest dealer group in the country, as it significantly increased the number of authorised representatives in its network while AMPFP and Count both experienced a slight decrease in their numbers.

This growth continued the trend of recent years, which has seen PIS steadily increase its adviser numbers over the past three years from 1,194 in 2005 to 1,329 in 2006, and, finally, 1,444 in 2007.

“We didn’t have a target of where we wanted to be; what we always wanted to do was make sure we could build a model based around a ‘high touch’ service level and that the business would grow as a result. It probably grew quicker than we ever thought it would,” Bennetts revealed.

He feels the key to PIS growth has been attracting more clients to be serviced by the group. To this end, PIS has just added 80 new accounting firms to its fold.

“Not only have we added 80 accounting firms, but what that means is we’ve added another 80 client bases that we can use to attract financial planners to come and service those client bases. That’s probably the biggest thing that we do. We help people find the clients of the future,” Bennetts explained.

AMPFP on the other hand has experienced a steady, if ever so slight decline in the total number of its authorised representatives over the past three years, slipping from 1,280 in 2005 to 1,259 in 2006 and to 1,222 in 2007.

Guggenheimer attributed this reduction to the succession process the group is undergoing.

“In terms of the net reduction, the bulk of that would be planners who have come to their retirement ages and are effectively exiting the industry,” he noted.

While Guggenheimer admitted the reach of AMPFP’s distribution network is important, he said the group is less concerned about the overall total statistics.

“Our focus in the last 12 months has been about improving the quality of advice standards and focusing on raising the bar, which I think we’ve done very successfully in terms of the advice we are now providing to our clients,” he said.

Like AMPFP, the number of authorised representatives operating under the Count Financial banner has steadily shrunk during the past three years.

In 2005, Count had a total of 943 advisers, which slipped to 892 in 2006. A further reduction in the group’s total number of authorised representatives was evident in 2007, with the current level standing at 885.

Lambert said this drop in numbers could be directly attributed to his group’s conscious effort to improve the quality of advice it offers.

“Over recent years, and particularly since the AFS (Australian Financial Services) licence changes, we’ve taken the opportunity to increase the quality of our network, and that has resulted in a slight reduction over the years. So we don’t have a policy to grow the absolute numbers,” he explained.

According to Lambert, one initiative that has ensured higher standards in the quality of advice provided by Count Wealth authorised representatives is the introduction of a higher designation within the group that goes beyond industry norms.

Count now recognises three levels of adviser in its operations. Level one is made up of individuals who are PS 146 compliant, while level two consists of those authorised representatives who have professional designations, such as Certified Financial Planner from the Financial PlanningAssociation or the Certified Practicing Accountant designation from CPA Australia.

“A level three adviser will qualify for levels one and two, but then they do an independent examination that we outsource to Finsia. That is a comprehensive plan done every year, and if they pass that they become a level three adviser and we actually recognise them with a small allocation of options in Count,” Lambert explained.

He said Count is uncompromising in its pursuit of ensuring high quality advice to its clients.

“They [the authorised representatives] have no real choice [in complying with the standards set] because all the systems are head office-produced. That’s the way we do business, and if they don’t want to do business our way they go somewhere else,” Lambert said.