Planners look to PAYG dealer group service model
Ownership of the client combined with dissatisfaction with costs have emerged as the key reasons why financial planners want to change their dealer group arrangements, according to a survey of more than 180 planners conducted by Money Management.
With around 54 per cent of respondents indicating they do not believe they receive value for money from their current dealer group arrangements, the strongly preferred alternative has emerged as self-licensing combined with arrangements under which they purchase dealer group services only as required.
Of those who indicated their dissatisfaction with current dealer group arrangements, 58 per cent said they would pursue a self-licensing model, with 30 per cent of those indicating that their preference would then be to purchase support services from either a dealer group or an aggregator of such services.
A number of respondents stated that their dealer groups were already allowing them a relationship under which they only paid for the services they used.
Interestingly, around 20 per cent of respondents suggested that industry groups such as the Financial Planning Association (FPA) or the Association of Financial Advisers (AFA) could act as the providers of the dealer group services required by their members.
A number of respondents noted that dealer groups were too compliance-focused at the expense of other services they might deliver to planners.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
