Former Macquarie Group advisers have cited the business’s hard line on client segmentation – not new remuneration models – as their reason for departing at the end of last year.
Several advisers who recently left Macquarie confirmed press reports this week that about 20 advisers within Macquarie’s wealth division departed the business in advance of a new structure due to be introduced in April this year. It is understood that Macquarie has between 170 and 200 advisers.
Macquarie Private Wealth and Macquarie Private Bank advisers will shift to a new remuneration model starting from April 1, which will comprise salary and profit share. At the same time, the group will discontinue the practice of receiving grandfathered commissions.
Speaking to Professional Planner on condition of anonymity, one ex-Macquarie adviser rejected the assertion the advisers had left because the group had decided to move from a commission-based remuneration structure to a salary-plus-profit share model.
“The pay models and the commissions thing have nothing to do with why advisers are leaving,” the adviser said. Instead, they added, the reason behind the departures relates to new rules that require existing clients to have $1 million in investable assets or provide revenue of at least $10,000 a year. The $1 million cut-off is a problem for many existing clients, the adviser said – especially pensioners in drawdown phase.
A second former Macquarie adviser took issue with the group’s three new fee structures, which he said included: a flat fee of 1 per cent for clients with up to $5 million in FUM, which then “tiers down”; a hybrid system of fees plus brokerage; and another model involving a separate trading account.
This second adviser pointed out that a flat 1 per cent fee is difficult to justify for a low-maintenance client with mostly passive investment needs, especially if they are closer to the $5 million FUM limit.
There has been no confirmation Macquarie plans to drop existing clients below the $1 million in investable assets cut-off the departed advisers cited.
Macquarie Group’s banking and financial services group announced in May last year that it was focusing new private client business on the high-net-worth segment.
In the May press release, Macquarie’s head of wealth management, Bill Marynissen, noted that the decision to focus on HNW clients “impacts a number of advisers”.
“Macquarie is supporting these advisers in a number of ways, including by facilitating discussions with other firms and assisting with their transition,” the statement read.
