The mid-tier advice segment is highly motivated and primed to take advantage of the big four banks’ and AMP’s retreat from wealth, according to HUB24’s Andrew Alcock.

The surge of strong, medium sized advice groups will accelerate, according to the chief executive, with many of them looking for new partnerships in an effort to position themselves well.

“This segment is experiencing the largest growth,” the chief executive said in a media release today touting HUB24’s relationship with mid-tiers advice groups.

“HUB24 provides a great solution for these growing non-institutionally owned licensees who are looking to offer their advisers and clients access to innovative investment solutions and choice,” Alcock said.

The institutional exodus from advice has been a key theme in industry as all major banks, and more recently AMP, have committed to reducing their network of advisers or exiting the sector entirely. After the Hayne royal commission’s study of the sector and – among other things – the imminent banning of grandfathered commissions, the institutions are keen to minimise their wealth footprint.

Mid-tiers represent “a dynamic and growing segment of the industry”, the release stated, before quoting figures from the Q2 2019 Adviser Ratings Adviser Musical Chairs Report saying 20 per cent increase in advisers moving to new licensees in Q1 2019. Echoing the trend away from the banks, the release said four times as many advisers are moving to non-aligned licensees as aligned licensees.

HUB24 put forward that the platform is resonating with the mid-tier advice group because of its managed portfolio functionality and “flexibility to cater to different business models”.

The platform provider recently signed two prominent mid-tier license groups, Centrepoint Alliance and Madison Financial Group, which represent a combined 450 advisers.

Alcock said he is “delighted” with the partnerships, adding that they represent a “dynamic, exciting and growing part of the industry”.

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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