After being one of the most ubiquitous names in advice and one synonymous with the growth of BT Financial Group’s superannuation and platform businesses in the last decade or so, John Shuttleworth pretty much went off the radar.
The affable executive was still around, however, consulting behind the scene to different firms looking at making private equity moves in the market.
During the tail end of that three-year stint Shuttleworth found himself working with the board of listed mid-tier licensee Centrepoint Alliance, a gig that led to him picking up the chief executive job after former CEO Angus Benbow stepped down to lead global gym-tech company Wimp2Warrior.
Having that experience consulting for the board gave Shuttleworth a rolling start to the job that proved vital. Two weeks before his appointment was made public the board had started negotiating to buy the advice businesses of fellow listed entity Clearview, which meant he was stepping right into the middle of a deal that would make Centrepoint the fifth largest licensee in the country.
“From around March I’d been doing some consulting with the Centrepoint board so I was close to the executive team and fully aware of the strategy,” he tells Professional Planner. “I’d already had discussions about M&A activity and how the business needed to scale, so it wasn’t exactly a cold start.”
The eventual deal saw Centrepoint bring in roughly 180 advisers across Clearview’s Matrix and Clearview Financial Advice dealer groups to join the 320 advisers in its own Alliance Wealth and Professional Investment Services brands to form a 500-strong network of advisers. Centrepoint also acquired Clearview’s La Vista service model, adding with it 480 self-licensed advisers on top of Centrepoint’s existing 320 service-only clients.
Put that all together and you get the kind of scale most mid-tier licensees can only aspire to.
“With small to mid-tier licensees you really need a certain level of profitability to be able to invest in services,” he says. “Centrepoint was in a position where it made sense to purchase another business but it needed to be very selective, there are only a small amount of businesses you feel comfortable with.
“A lot of smaller mid-tiers have been bouncing the cashflow line,” he continues. “If you look at the services, practice development, there are costs across that, so by having 500 fee paying advisers we have a revenue stream that means we’re financially stable and can continue that investment.”
The deal gave Clearview the opportunity to separate its product and advice arms in return for a 25 per cent stake in Centrepoint (worth $15.2 million) plus $3.2 million in cash, while Centrepoint managed to scale up with a partner that Shuttleworth says has a similar cultural identity.
“The first thing to look at when businesses come together is cultural alignment,” he explains. “These businesses have that. There’s a good service ethic and they both understand the business exists to service the advisers because the advisers have choice about the provider they use.”
Another bonus for Centrepoint, Shuttleworth says, is the retention of talent; Clearview CEO and Matrix co-founder Alison Dummett will head up Centrepoint’s licensee business while industry veteran Simon Swanson will take a board position.
From here, moving forward for Centrepoint in the short term means transitioning into one unit with as little ambiguity for advisers as possible. Shuttleworth says Clearview Financial Advice brands will fold into Matrix (a move that had already begun under Clearview) leaving four strong licensee offerings.
In the longer term, the door for more activity remains open. Centrepoint could also make further acquisitions, he says, with further rationalisation of brands a distinct possibility. It also has its eye on culturally aligned advisers that may be looking for a new home.
“We don’t want growth for growth’s sake but clearly there are a lot of advisers on the move,” he says. “We’re talking to a lot of AMP advisers after the BOLR announcements came out and quite a few from IOOF. We’ve got about 35 coming over from (ex-MortgageChoice owned) FinChoice. There’s a lot of displacement going on so we’ve got a pretty healthy pipeline.”
Shuttleworth is bearish on the chances of softer regulation for advisers after next year’s review (“I can’t see a lot changing”, he says) but his view on the industry is strongly positive after its post FoFA and royal commission restructure.
Such is his confidence in the industry, he’s confidently telling young people that financial advice is career of choice for the future.
“My daughter’s boyfriend just completed his uni’ studies and said he’s interested in financial services,” he says. “I suggested a career in financial advice because there’s a lot of demand – you can earn a good living and it’s an honourable profession. Those advisers that run high quality business would agree with that, and so would their clients.”