BT's Phil Butterworth

Phil Butterworth admits that BT Financial Group’s new ‘Open’ suite of services will eat into the support role licensees and larger dealer groups have traditionally provided.

While Butterworth – who was previously general manager of BT Group’s licensees business – says he’s “not shy” about taking market share from licensees, he hopes to partner up with them one day to provide more efficient services.

Speaking to Professional Planner after the launch of the business on Thursday, Butterworth acknowledged that the new suite of offerings was a move to target the wave of advisers moving away from fully serviced dealer groups and into a self-licensed arrangement.

“The move to self-licensing from some of the bigger firms is an absolute trend and we’re seeing that all around us,” Butterworth said. “[BT Open Services] is designed to service those that are self-licensed and those who are moving to that space.”

He denied, however, that the wealth giant was promoting the drift away from the licensee model.

“Whether or not we’re going to be the service provider in that space, that trend is happening,” Butterworth said. “We’re not stimulating any additional change in practices [towards] making those decisions.”

BT’s new suite of services includes BT Open, which was launched in July and included a much-publicised reduction in baseline pricing for the Panorama platform, along with the new BT Open Services, which gives advisers access to BT services and negotiated rates with third-party providers.

The new offerings represent a duplication of the services that licensees provide to advisers and have the potential to reduce licensees’ value proposition but Butterworth insists BT is not looking to replace licensees. Moreover, he says the “next phase” will involve leveraging their scale and technology to improve licensee offerings.

“The self-licensed market is certainly one that is an immediate market that needs support and is looking for it,” he explained. “But this offering could evolve to support the mid-tier dealer groups as well.”

He said BT would be engaging dealer groups to see what current and future services could be employed to help “practices that have a great future in the industry but don’t want to be self-licensed”.

Any competitive tension between BT and licensees, he said, would only benefit advisers and their clients.

“As they grow and get more scale, [practices] have more choice about how they structure their business, whether that be licensing or the platform they use,” he said. “The end consumer is going to be the beneficiary of transparency and competition.”

For the record, Butterworth said he believed licensees play a vital – and unique – role in the advice landscape.

“Dealer groups will have a value offering in the market in regards to the provision of licensing [and the] implementation of compliance for those practices,” he said. “That’s certainly where the licensee of the future really has its value proposition.”

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning.
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