Glenn Calder, Viridian CEO

Viridian Advisory CEO Glenn Calder won’t be begging advisers to join the group when he presents Viridian’s offer to the more than 400 authorised representatives of Securitor and Magnitude around the country this week and next.

Beginning in South Australia and Western Australia in the last week of March, Calder will head to Sydney and Brisbane in the first week of April, and then to Melbourne the following week, to put Viridian’s offer on the table to authorised representatives of advice practices, many of which are likely to have already decided their future plans.

Professional Planner spoke to several practice principals who are authorised representatives of the Westpac-owned aligned dealer groups regarding their intentions. These advisers have been given a “D-Day” date of September 30 this year to be cut loose following the announcement in March the bank would exit advice. Westpac’s salaried advisers have until June 30 to find another employer or licensing alternative.

A few of these practices contacted by this publication have already received regulatory approval to become self-licensed after beginning the process some months ago, other practices have engaged in discussions with alternate licensees and are awaiting for more details regarding Viridian’s offer.

“I certainly don’t think everyone will come across. We’re not convincing people to do something they don’t want to do, what we’re doing is giving people who are culturally aligned the opportunity to join,” Calder told Professional Planner.

Three options on the table

“Westpac wanted to give them [Westpac salaried and aligned advisers] a viable alternative rather than just cut them loose,” Calder described.

While Calder declined to provide finer details of the Viridian offer, he outlined that advisers accepting deals from Viridian would fall into one of three groups: either employed within Viridian’s salaried network, “affiliated financial advisers” under the Viridian dealer license, or as a self-licensee plugging into Viridian’s services.

The Viridian offer will include advice practice fees as well as a per adviser rep fees, as is usual with licensee offers, Calder noted.

Calder strongly refuted speculation there was a cash bonus on offer for authorised representatives of practices to join Viridian as part of the deal.

Calder added that the Viridian model would not be subsidised by platform or product revenue, even though Viridian lists BT Wrap and BT Panorama, along with Viridian’s own portfolio management option, as well as CommSec Adviser Services and HUB24, on its website as clients. Most of the Viridian leadership team and board were formerly with Westpac and BT.

Many breaking away

One large advice practice which claimed to be part of Westpac’s 15 member partnership group, each of which are believed to have client books of up to between $300 million and $500 million and share revenue with the bank, told Professional Planner that this practice had no intention of joining Viridian. This practice principal spoke on the condition of anonymity.

“The top advisers in the business are very client centric and they want to make sure what they are doing is in the best interests of their clients,” this practice principal said.

“This [announcement by Westpac to leave advice] will lead to a lot of practices banding together in some sort of co-op or collective,” a separate practice principal within the Securitor network, said.

“We are not ruling out going self-licensed, but at this stage it’s a bit of a race to go down that path because of the delays we’re hearing it takes to get regulatory approval [to become self-licensed],” this Securitor practice principal, said.

Jason Dix, director of Wayville South Australia-based Carrington Financial Services, a former Securitor representative, has recently become self-licensed after a five month process.

“Most [Securitor practices] will probably look to go self-licensed but their biggest dilemma is will they have time? We’ve just gone through the process and it’s taken us five months, which is just the amount of time the regulator is taking to process applications,” Dix said.

Triple the size

Viridian is an unlisted private wealth advisory business with six offices in four states and its own investment management business called Infinity Asset Management, which operates separately managed accounts. This time last year Viridian had 37 authorsed representatives, according to Professional Planner’s 2018 licensee owners list.

In March, Westpac CEO Brian Hartzer said the bank had done a deal with Viridian to transfer control of up to 175 BT Financial Advice staff, which was supposed to include 90 financial advisers. In addition to this deal, Westpac was piloting a “referral model” which was apparently paving the way for the Viridian deal to be presented to the Westpac aligned dealer ARs. Westpac had 803 advisers at the end of September last year, 414 were within the aligned dealer groups and 389 were salaried advisers.

Westpac has estimated it will wear up to $300 million in exit and restructure costs from the decision to offload advice business but it has not provisioned for any sale proceeds in its disclosures.

In addition to the exit and restructure costs the bank disclosed, Westpac has already paid $175 million in remediation costs to clients on behalf of its advice business during financial years 2017 and 2018.

 

 

Smith is the editor of Professional Planner’s print and digital platforms. He is an experienced financial journalist, editor and multimedia producer who has held senior editorial positions both in mainstream press and trade media.
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