Renato Mota

Insignia Financial CEO Renato Mota says he still maintains full ownership of Godfrey Pembroke and that the advisers that operate under its licence are not yet free to pursue other suitors.

Mota says Insignia still intends to sell the Godfrey Pembroke business it picked up in the acquisition of NAB’s MLC back to its 50 aligned advisers, while retaining a minority stake. That course of action was announced last month as part of a major shake-up of the wealth giant’s licensees.

“We don’t have any update on what we said last time, but from our perspective it’s pretty crystal clear,” Mota tells Professional Planner.

But the future of Godfrey Pembroke advisers has been the source of confusion and speculation in the market, after Clime Investment Management announced last week to the ASX a non-binding deal with Practice Development Group, which represents Godfrey Pembroke advisers, to merge with Madison and create a new company called Service Co that Clime would hold a minority stake in.

Analysis by Professional Planner showed Clime was making a de-factor claim on Godfrey Pembroke’s intellectual property, since it claimed the new entity would have around 130 advisers and $8 billion funds under advice. Sources close to the PDG camp suggested that entity was in control of the Godfrey Pembroke licence and client relationships, making them free to pursue a deal with Clime.

But Mota says Insignia maintains its 100 per cent ownership of Godfrey Pembroke and its assets until otherwise notified and there is currently no change to relationship.

The agreement between Clime and PDG has a stated deadline of 30 March 2024 and Insignia has expressed no issue with any deal post-divestment.

Closure of the Lonsdale licensee is almost complete while Millennium3 is still being shopped around the market.

“Cultural fit is always a priority with these businesses, and we know that they are relationship-oriented – there’s an aspect of trust which goes to culture so that is certainly a factor,” Mota says.

“We’re working through the process, but cultural fit would be one of the featuring attributes we would consider. It’s important to use that those advisers that whatever licensee they end up with, that is something that can support their business and continue to help them prosper.”

Moving on

Along with the Godfrey Pembroke announcement last month was the planned divestment from its main licensee business and the creation of Advice Services Co, which will comprise RI Advice Group, Consultum Financial Advisers and the amalgamation of MLC Wealth licensees known as TenFifty.

Insignia conducted a preliminary survey via CoreData Research in August which found out of 170 respondents that a “majority” agree the ASC will enable greater input into group strategy and decision making and that most advisers view the partnership model as having a long-term positive impact.

Only 2 per cent indicated they were unlikely to continue their partnership with the group over the next 12 months.

Mota says there haven’t been any concerns flagged to him by the network over shake-up but acknowledges there is more information required from the organisation.

“There’s certainly a thirst for understanding more and a thirst for detail which is great and in due course we will provide all our advisers with the necessary detail,” Mota says.

“However, what excites them is the opportunity to improve alignment. Improve alignment between the advice practice in the licence by giving them greater say in the operations of the licence.”

Reporting its financial year results to the ASX on Thursday morning, advice segment underlying net loss after tax improved $21.4 million from $55.3 million in FY22 to $33.9 million.

Net revenue decreased $17.8 million due to the Bridges integration with MLC Advice, but expenses decreased $42.8 million due to simplification initiatives in the division.

Mass appeal

Insignia will also launch the “client wellbeing” division which will focus on pursuing opportunities to provide “financial help, guidance and advice through all stages of life, and improve client engagement”.

The division will include the professional services advice teams, Bridges and Shadforth, and will be led by a newly-created chief client officer position who will report to Mota.

“The market at large including regulators and government have acknowledged that not enough people can get the help they need and that advice isn’t as accessible or affordable as it needs to be,” Mota says.

“We have – I would argue – deeper and broader advice capabilities than anyone else in market. In our own business we have circa just shy of 2 million, the large majority of which don’t get access to financial advice, not to mention the broader community.”

Mota says the creation of the division is centred around the needs of members and bringing those capabilities together to create a more seamless continuum of help, guidance and advice.

“That’s going to be mean different things to different people but creating a continuum that can serve our members and service prospective members and clients in the broader community is absolutely the mandate of this new division,” Mota says.

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