Garry Crole

Prioritising practices over licensees, Sequoia’s growth plans will focus on taking on total ownership of advice practices and avoiding the “Pandora’s Box” of the potential liabilities of owning another licensee.

Sequoia CEO Garry Crole says the intention is to buy practices from retiring advisers which will be staffed by employed advisers instead, but they aren’t aggressively pursuing it.

“We’re not likely to buy more licensees though,” Crole tells Professional Planner.

“If we were to grow by acquisition in the licensee area, we’d be looking to buy the rights to the advisers rather than buy other licensees.”

Crole says the liability of acquiring another licensee is too risky for the business and not justified by the return on investment.

“We’re not open to opening up Pandora’s Box and not being able to see what you don’t know, that’s the issue,” Crole says.

Practices acquired by Sequoia are 100 per cent owned by the group with the advisers becoming employees, rather than going part-equity stake route of other licensees like Count and Diverger.

“The challenge we’ve got is there isn’t enough advisers looking to become employees,” Crole says. “If you take on too many books, you can’t service the clients with the current shortage of advisers.”

Crole says the group has 20 provisional advisers doing their professional year.

“We’re making an effort to introduce new advisers into the industry but it’s a big challenge,” he says. “[It’s] hard to find people that just want to be an employee rather than own their own practice.”

Liberated

Citing potential liabilities as the reason not to pursue scale by acquiring other licensees, Sequoia has closed Libertas Financial Planning with advisers given the option to join InterPrac or Sequoia Wealth Management, find another licensee or go self-licensed.

“We gave advice to the Libertas advisers four or five months ago that we’re going to stop providing services to the group,” Crole says.

Crole underlined the fact that the Libertas advisers were never transferred to the other Sequoia-owned licensees, and it was up to individual choice to stay in the Sequoia network.