Private, white labels back in vogue
Strategic partnerships between product and service providers and financial planning dealer groups appear to be going through a phase of revival with the renewed optimism in the markets.
However, industry experts say such partnerships are much more aligned to clients' interests now than in the past.
In April this year, Colonial First State (CFS) launched ‘Ultimate', a full-service wrap platform specifically developed for Queensland-based dealer group Infocus Wealth Management.
This was one of the first such partnerships announced in the last few years, when the market was busy emerging from the depths of the global financial crisis.
Under the arrangement, CFS would administer the Future of Financial Advice-compliant platform and provide custody services for Infocus' financial planners and advisers.
Due to the changes to the financial regime and the way financial planners interact with their clients, the last two years saw dealer groups look beyond the customised solutions, seeking the cheapest and most efficient product or service, according to Australian Unity Investments head of retail distribution, Damen Purcell.
"Clients, too, in the last couple of years have become increasingly wary of financial planners with a certain brand on the door putting them into a product with the same brand on it," Purcell said.
In the past, Purcell said, dealer groups were looking to strike a good fee deal with a wrap provider — and those arrangements would not necessarily be the best option for the client.
"Where I think it's starting to change now is that dealer groups are starting to understand that there's a distinct opportunity to provide cost-effective options to clients, and it fits the best interests duty that they have by doing white labels again," he said.
"It's a revival, but it's a revival in a good way. Dealer groups are starting to use constituents within their group to get the best deal on the platform, and at the end of the day that's the best deal for the client," Purcell added.
"You're also going to see some asset managers offer preferential deals to dealer groups."
In fact, Instreet Investment announced last week it had developed a structured product specifically tailored for members of the Association of Independently-Owned Financial Professionals (AIOFP).
Under this arrangement, Instreet would provide a tailored product to Personal Choice Management (PCM), a member-owned licensee which provides investment services to AIOFP.
Instreet managing director George Lucas told Money Management the company had recently seen increased demand for bespoke products, as advisers and dealer groups see such partnerships as a way to add value to their clients.
"The demand died down in the last two years, but the last six months have seen a revival of that demand," Lucas said.
Recommended for you
Insignia Financial has granted CC Capital access to select company information in the hope of securing an improved offer from the private equity firm.
Recruitment agency Robert Walters has revealed the expected salary ranges for Australian financial advisers in 2025, with one particular state seeing a decline.
As global PE firms scope out the Australian wealth management industry, Finura predicts which other local names may potentially receive a takeover offer this year.
The Sydney-based advisory group has welcomed a new partner to its ranks, who previously led advice licensee businesses at Insignia Financial and MLC/NAB.
