Sequoia looks to organically grow licensee market share
Sequoia has shared its strategic initiatives for FY25, including organically increasing its licensee market share and restructuring its specialist investment arm.
In its 2024 annual general meeting (AGM) held on 20 November, the financial services company and advice licensee confirmed its key strategic initiatives. These include:
- Divesting non-core businesses and streamlining existing operations.
- Continuing to invest in technology that will drive greater efficiency.
- Restructure the Sequoia Specialist Investments/media businesses to grow revenue.
- Using its strong balance sheet to focus on growth initiatives.
- Increasing market share organically in licensee services.
- Increasing market share in legal and administration services business.
In a presentation last month, Sequoia chief executive Garry Crole said that investing to grow its higher-margin salaried advice business is an increased focus for the licensee.
Similarly in its AGM, the firm noted that it was among only three major licensees to increase its adviser numbers in FY24 despite overall adviser numbers falling.
“The growth focus in the shorter term for this [advice] division will be to increase the size of our salaried businesses. The demand for financial advice is accelerating as the 65+ population increases, coupled with growing per-capita funds under advice across Australian families.
Wealth Data recently provided an updated ranking of the 10 largest licensee owners in Australia, as at 7 November 2024. This saw Sequoia in eighth place with 339 advisers, while AMP Group sat in the lead with 809 advisers.
In its legal and administration services division, Sequoia stated that its market share continued to increase to approximately 10 per cent in a highly fragmented industry, providing a consolidation opportunity for further organic growth.
Its customer base of 1,200 accounting firms who use Sequoia for their legal documents, which represents 11.4 per cent of the addressable market, presents an attractive customer base for upselling, it said.
“This customer base allows for upside to sell additional products and services to increase revenue and margin.”
Earlier this year, the firm was subject to a shareholder rout where a group of shareholders tried to bring in two new board members in Peter Brook and Brent Jones to replace Crole and director Kevin Pattison.
At an extraordinary general meeting held in June, the shareholders were unsuccessful in their plans but Sequoia committed to making changes in the business to reflect the shareholders’ concerns.
These changes included streamlining the current operating business model, streamlining the divisional business structure, being open to divestment opportunities for non-core businesses, and increasing scrutiny on underperforming parts of the business.
AUTHOR
Jasmine Siljic
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