Merging two separate compliance frameworks is among the final stages of ClearView Wealth’s acquisition of Matrix Planning Solutions, says Todd Kardash, chief executive officer of the combined dealer group business.
The $20 million takeover of Matrix was first announced last September. Since then, the two Australian Financial Services licensees’ financial systems and marketing arrangements have been merged.
A number of senior executive staff changes have also been made, including Kardash’s appointment in November, and Matrix’s head office has been moved into ClearView’s Sydney CBD premises.
“One of the last pieces to go is the rolling out of compliance and Statements of Advice (SoAs)…At the moment it’s all about getting the synergies in the back office,” Kardash says.
A working group of Matrix and ClearView advisers has been closely involved with this, and the new SoAs are set to be officially rolled out to all practices during the group’s professional development days in July.
“We just took the approach that we had our own philosophy at ClearView on what we believe the interpretation of the regulation is, and Matrix had theirs. They weren’t too dissimilar anyway.
“We looked at both sets of compliance manuals and just pulled out what we thought were the best-of-breed aspects, the most appropriate and, to be honest, the most commercial ways for an adviser to go,” he says.
Overall, ClearView and Matrix have around 220 authorised representatives spread across some 100 practices. Some of these employ five or six advisers, while others are sole traders. “But on average, we have around two authorised representatives per practice,” Kardash says.
Individual adviser compliance
As numerous high profile cases in recent years have shown, failing to weed out ‘bad apple’ advisers can be a costly exercise, both financially and reputationally. This is as true for large institutionally-owned dealer groups like Commonwealth Financial Planning as non-aligned licensees – as Libertas Financial Planning found earlier this week when it had to terminate the authorised representative status of planner James Horwath.
“Our compliance starts before we even bring someone on board…We look at what their practice experience is, how long they’ve been in business, and their last compliance report…from their current AFS licensee,” Kardash says.
“We then do our own spot checks on a number of plans [the individual has completed]. We’re pretty heavy in this…we take a different approach to a lot [of other licensees].
“We make it hard to join and easy to leave. I think a lot of licensees do the opposite.”
He believes it is crucial to ensure licensees have the right framework to identify and eliminate such candidates beforehand: “Is this the right person, culturally, to come to the dealer group? Life’s too short to be dealing with difficult people.”
Equally, Kardash says it should not be overly complicated for practices or individual planners to exit a licensee. “If someone wants to leave, let them go! Seriously, I just don’t understand these licensees that make it extremely difficult for advisers to go…let people move on, make it easy for them.”
This article was edited on 10/10/17 to make it clear that the authorised representative status of James Horwath was terminated by Libertas Financial Planning.
