The ex-ANZ advice business acquired by Insignia in 2017 has achieved breakeven with the goal to achieve the same result with MLC Advice by FY24.
Insignia chief executive Renato Mota tells Professional Planner the ANZ advice business was losing around $25 million when it was acquired.
“Our aspiration is to have high quality, unsubsidised advice business. Clearly an advice business losing that money doesn’t align to the value of advice or having a sustainable advice business.”
Echoing the sentiment of its institutional contemporary AMP, Mota embraced the idea of different parts of the business standing on its own two feet.
“We made it clear it’s important for the future of advice these businesses are not beholden to other parts of the value chain.”
Focus now shifts to MLC Advice which reported an underlying net loss after tax of $48.1 in its FY22 results, an improvement of $23.7 million compared to $71.8 million in FY21.
MLC Advice was acquired last year and Mota says the MLC business shared similar loss-making dynamic to the ANZ advice group.
“Albeit it was a far larger loss that started at about $100 million dollars [for MLC]. The strategic intent is the same – we don’t believe these businesses can lose money. We don’t think that’s good for the advice industry and there’s tremendous value in advice.”
Mota says each aspect of advice delivery, whether its licensees or advice practices, needs to ensure its own viability.
“There were a lot of learnings that came out of ANZ and the team have done a terrific job there. In many ways it’s a bit of rinse and repeat. Merging MLC Advice and Bridges is terrific; it creates a large-scale, mass-market advice model that we’ll continue to invest in but there’s still some ways to go to make sure we hit that sustainability target.”
The advice sector of the business reported an underlying net loss after tax of $55.3 million, while underlying net profit after tax for the full business increased 59 per cent per cent to $234.5 million.
The platform business, which has undergone significant transformation, saw underlying NPAT increase 116.5 per cent to $273.5 million.
Remediated
There was $186 million in cash payments for advice remediation made during FY22 with a further $48 million expected by the end of September 2022, reducing the remaining balance to $144 million.
Assessments under the historical fee for no service remediation are expected to be completed by the end of next month.
ANZ P&I remediation was completed and MLC remediation underway which will continue into the next calendar year.
There was $121 million paid out to clients, compared to $59 million the previous year.
Gimme an E+S+G
The firm also reported hitting governance targets which included commitment to climate change and gender diversity.
Over 45 per cent of women have filled senior roles, while the gender pay gap is ahead of the industry average which has reduced to 14.3 per cent.
“That really aligns closely to our culture and we’re really passionate about building diversity and inclusion in the business,” Mota says. “We’re strongly of the belief our culture and organisation should reflect the communities we serve. To the extent our communities are half female/half male we expect our workforce to reflect the same.”
Additionally, it achieved its carbon neutral status during the financial year in line with the firm’s ESG strategy.
