Renato Mota

Insignia Financial will change the naming conventions used to describe its advice channels to “improve understanding of the differences” between the channels.

In its Q3 update to the ASX on Wednesday morning, the firm said the 242 employed advisers will fall under the ‘professional services’ category, while the 750 self-employed and 491 self-licensed advisers are categorized as ‘advice services’.

These numbers, which are based on the end of the quarter, cover all 1483 advisers associated with Insignia.

Business-to-consumer models Shadforth Financial Group and Bridges make up the professional services channel which will continue to employ advisers to provide advice to clients on a fee-for-service basis.

Revenue through this channel is mostly derived from client fees – Bridges has fixed fees and is based on service packages while Shadforth adopts a hybrid fixed fee and asset-based fee.

The firm said the integration of MLC Advice into Bridges has reduced overall adviser numbers and revenue. Mota explained previously that the drop in revenue was due to low fee-paying clients moving off fixed term service agreements as MLC Advice was incorporated into Bridges.

“…the reason we’ve made that decision in the short term is because we see growth opportunities in the medium term,” Mota told Professional Planner in January.

“Part of this is about positioning the offer in a way that allows us to grow going forward accepting that means some change in the short term.”

The business-to-business advice services model will continue to generate revenue from self-employed and self-licensed channels.

The self-employed channel provides both fixed fees and revenue sharing models, with a practice fee forming the basis and incremental revenue from additional Authorised Representatives on the licensee.

The fixed fee self-licensed advisers pay for services used are charged at the practice level with additional incremental revenue per AR.