Fortnum's Ray Miles at the 2019 Professional Planner Licensee Forum

While mid-tier licensees lost their fair share of authorised representatives over the course of the last 12 months, and some had spectacular reductions in numbers, a small cohort of dealer groups managed to post significant growth during the period.

Only six mid-tier groups that sit between 10 and 50 on the Professional Planner licensee owners list posted significant gains in the last 12 months; Findex Group, Capstone Financial Planning, Shaw & Partners, Viridian Advisory, Highfield Group and Fortnum Private Wealth.

The fact that these firms have gained ground is remarkable, considering the industry as a whole lost over 5000 advisers or 18 per cent of the authorised representative workforce for the year due to a confluence of education standards, increased regulation and COVID-19 related issues.

On the other end of the scale, notables that lost ground include State Super ownership group FSSSP (down 15 per cent from 280 to 238 advisers), beleaguered advisory Evans Dixon (down 29 per cent from 157 to 112) and time-share proponents Wyndham Vacation Clubs (down 25 per cent from 267 to 201).

The path taken by firms to significant growth varies but the two biggest risers in the mid-tier share a common bond – both Viridian (up 220 per cent from 48 to 154 advisers) and Fortnum (up 117 per cent from 98 to 215) have benefited mightily from the break-up of Westpac’s advice arm.

Viridian had the inside running after it entered what Westpac called a “sale agreement” for BT Financial Advice in March 2019, after which Viridian CEO Glenn Calder toured the major capitals presenting the licensee’s offer to advisers from Westpac’s Securitor and Magnitude brands.

On July 1, 2019, Viridian’s numbers went from 40 to 150. “That was a big date for us,” Calder told Professional Planner in April 2019.

Shortly after the deal, Calder made it clear that numbers weren’t the main objective.

“I certainly don’t think everyone will come across,” Calder added.

It could be argued that Fortnum have had the most success adding organic scale in the last year. Founder and director, Ray Miles, says the firm “didn’t chase turnover for turnover’s sake”, and achieved the growth it did primarily due to an internal ownership model favoured by advisers.

“We chose good size good quality practices and that’s what we got,” Miles tells Professional Planner, adding that the firm also gained advisers from ex-CBA licensee Financial Wisdom. “The reason our model resonated is that we’re an adviser owned dealer group. There are no conflicts, no games being played. Every adviser has a chance to be an owner.”

While he admits that scale is helpful to licensees because it’s a “low-margin game”, Miles warns against measuring the success of a licensee ownership group by sheer numbers alone.

“It’s misleading and it promotes bad behaviour,” he says, pointing out that there are plenty of licensees with “a whole lot of crappy advisers” padding out the numbers.

Apart from these two, Melbourne-based privately-owned advice group Capstone enjoyed a 25 per cent uplift in numbers, while Sydney-based broking and advisory firm Shaw & Partners recorded a similar 24 per cent growth.