Keith Cullen

Despite reporting an indicative 57 per cent annual increase in revenue, WT Financial Group will maintain its focus on driving further growth with the practices in its network rather than “chasing” more advisers.

On Tuesday morning it reported a 57 per cent increase in revenue from $103.63 million in FY22 to $162.49 million, along with a 130 per cent boost in net profit after tax from $1.87 million to $4.31 million. The company expects its audited financial results to be due mid-September.

Group founder and managing director Keith Cullen tells Professional Planner the acquisitions WT Financial Group has made have been a key component to revenue growth, but more importantly it was the ability to rationalise the network and back-office operations that drove profit growth.

“We’ve brought together three disparate groups of advisers,” Cullen says, referring to Wealth Today, Sentry and Synchron.

“We’re keeping the culture within those groups and the names because there’s so much legacy value in those cohorts of advisers. But in terms of the service proposition to them we’ve really standardised everything on the back end, so we have our personnel working across of all three of the cohorts.”

Cullen says no changes are expected to the company’s cost base, with the focus instead being on continuing to grow top-line revenue, which won’t prioritise “chasing new advisers”.

“As much as the door is open and we’re welcoming them, it’s more about working with the practices that are in the group to make their businesses more profitable,” Cullen says.

“With the vast majority of our practices we participate in revenue upside with them, so their profitability and our profitability are completely aligned.”

However, the group currently has approximately a quarter of its 400-plus adviser network on fixed-fee arrangements put in place before WT Financial Group acquired the licensees.

While Cullen doesn’t have an issue with the dollar figure currently generated by the fixed fees, he still believes the model isn’t logical.

“If I was a practice, I wouldn’t want that either – I want my licensee and myself to be on the same page in terms of what’s important and that’s the financial health of the individual practices,” Cullen says.

“To me, that’s the transformation that needs to happen. I don’t know how people that have gone down that fixed fee path back away from it.”

Cullen elaborated on the issue of fixed fees for licensees at the Professional Planner Licensee Summit in June, explaining it doesn’t compensate licensees adequately for risk.

“I’m not disappointed with the level of fees they’re paying us,” Cullen says, adding the mechanism for getting to that level needs to be aligned.