Reforms won’t affect our business: DKN
DKN Financial Group is confident the proposed ban on commissions and volume-based rebates will not affect the fees it receives under its existing distribution contracts with its core platforms.
DKN chief executive Phil Butterworth made the statement as part of a presentation for the group’s annual general meeting today, with the group’s view based on “the information released to date” in relation to the proposed Future of Financial Advice reforms.
Butterworth said the group also believed wealth management practices do “have the ability to be sustainable profitable businesses” in a fee-for-service environment, but that they need to team up with the right solution provider.
“The focus of our platform pricing strategy is to attract fee-for-service advisers where they generate their fees from their clients and are not reliant on rebates,” the group said, adding it currently pays small rebates to licensees for scale.
DKN company secretary Derek Russell told shareholders the group remained optimistic despite lower profits achieved during the 2010 financial year.
“Of course, the results are still well below previous expectations because of the impact of market valuations on our [funds under administration] and on the willingness of investors to return to the market,” Russell said.
“The underlying business model … and wealth management networks should ensure satisfactory growth levels will return with a positive market environment.”
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