Despite the fact that it’s three amalgamated brands should give MLC licensee spin-off TenFifty around 450 advisers, CEO Brendan Johnson says the newly minted dealer group will sacrifice a good deal of that scale and run more of a boutique licensee with far less advisers on the books.

Since National Australia Bank’s MLC Wealth announced the retirement of its Garvan, Apogee and Meritum licensees in May, Johnson and his team have been shaping the new TenFifty brand into a cleaner, leaner model than the simple sum of those three brands.

Cleaner, he says, because the licensee is not accepting any product subsidies and advisers under the TenFifty umbrella must run fee-for-service client remuneration models with contracts renewed annually.

And leaner, he continues, because not everyone will be along for the ride.

“We are inviting businesses that want to be part of it, and it doesn’t fit for all of them,” Johnson tells Professional Planner.

The challenge ahead for Johnson is daunting. He needs several tribes of parochial advisers who are likely anxious about their future to coalesce and form a cohesive unit.

It’s not just a matter of cobbling the old licensees together and carrying on, he says. The new group has advisers from a cross-section of other licensees – including some of the franchised practices from NAB Financial Planning – which has led to a cultural refit and an entirely new identity.

“And that process will result in a lower number of business,” the CEO says.

The new mindset is why the group spent so much time and effort on a “symbolic” rebrand. TenFifty didn’t want to replicate something or merely tweak the old model, he explains, but create something new.

Johnson hopes that what TenFifty loses in scale they will make up for in culture and community.

“The test of what is too big is if I don’t know every busines owner in the network,” he says. “If they don’t know me then we’re too big and it’s not a community anymore.”

A necessary impost

The abandonment of product subsidies at the licensee level is an impost, Johnson explains, but one that the industry needs to get used to.

“My strong view is that licensees should not be subsidised by product, whatever the business model construct is,” he says.