The second partner firm to join Bombora Advice will be in place by the end of the month, and the firm is on track to have five partner firms in place by June 30.
The second firm to join the group will be the Brisbane-based Personal Risk Professionals (PRP), which currently operates under the National Australia Bank-owned licensee Meritum.
PRP principal Mark Everingham says the move to Bombora was a simple decision after Handley set out the company’s corporatised “advice-first” business model and philosophy. Everingham says alternative licensee solutions tend to be product-focused – vertical integration exists between the licensee and the product manufacturer, when the integration really should be between the adviser and the licensee.
“Vertical integration has gone the wrong way, from advice to product” Everingham says.
“The product provider is providing the Australian Financial Services Licence (AFSL) to provide advice – and that does not sit well with me.
“Wayne spoke to me 18 months ago around the fact that we could build a business where the vertical integration is from the adviser to the licensee and that’s where it stops, and I believe that’s how it should be.”
Everingham says this version of vertical integration allows an advice business to focus on the true value-adding services of financial planning, and product only comes into the picture if it’s needed – the business is profitable from selling advice and services.
Everingham says licensees typically respond to a risk “gap” in their offering by saying “we need to fill this with a product solution”.
“It’s not that,” he says.
“When you sit down with a client, [you say], if the worst happens to you, what happens next? That’s not a product discussion.”
The managing director of Bombora, Wayne Handley, says the firm’s focus on creating a better licensing structure for risk specialists is generating significant interest and discussion.
However, delays to implementing the Future of Financial Advice (FoFA) reforms have been “a headwind” that the business really didn’t need, he says.
“The only headwind has been around grandfathering, and that’s a headwind the entire industry could have done without,” Handley says.
“But the interest hasn’t stopped. That’s been the pleasing aspect of it. We’ve never been in a rush, as an organisation. And the last thing we’re going to telegraph is we’re going to be X number of advisers by X time. We’ll take our growth slowly. Over five years we’re going to become a nice boutique, risk-focused business, predominantly on the east coast.”
