Insigina atop a fragmented pile of licensees

As Renato Mota announces plans to leave the business he’s helmed since 2019, he is departing from comfortably the largest financial advice business in the country.

Data provided to Professional Planner by Adviser Ratings, current as at October 19, shows Insignia authorises 955 financial advisers, across eight separate licensees – although how much longer Godfrey Pembroke, with its 52 advisers, remains part of the Insignia group remains to be seen.

It’s a group assembled from home-grown licensee businesses and businesses acquired from others, mostly ANZ and NAB.

The largest Insignia-owned licensee, Consultum Financial Advisers, authorises 305 advisers, while the smallest in the group, Australian Executor Trustees, authorises just eight. RI Advice authorises 208 advisers, with Millennium3, Shadforth Financial Group and Bridges Financial Services authorising 139 advisers, 126 advisers and 105 advisers, respectively.

Insignia, via IOOF Alliances, also provides services to advice firms that own their own Australian financial services licence.

These figures place Insignia comfortably ahead of AMP and Centrepoint Alliance, which authorise 872 advisers and 520 advisers respectively. Between them, the three largest licensee groups authorise more than 2300 advisers and account for 15 per cent of the market.

The Adviser Ratings data shows there is a total of 15,702 individuals listed on the ASIC financial adviser register, net of dual authorisations (where an individual is authorised by two licensees).

It’s a far cry from its all-time peak of more than 28,000 at the end of 2018, and numbers declined by a reported 600 or so in the 12 months to June 30 this year.

The Adviser Ratings numbers show that the 20 largest financial planning licensee groups now collectively authorise almost 6800 advisers, or about 30 per cent of the total market, and the 50 largest licensees authorise well over half (57.1 per cent) of all advisers in the country .

While the stranglehold of the biggest licensees on the industry has relaxed somewhat since the exit of the big banks from the profession, the Adviser Ratings data shows that it nevertheless remains fragmented outside of the top tier. Only the three largest groups authorise 500 advisers or more and, overall, only 24 groups authorise more than100. Only 18 groups authorise between 50 and 100 advisers.

It’s a market where licensees are finding it increasingly difficult to grow adviser numbers substantively; in this environment they’re seeking other avenues of growth and increasingly that means helping the businesses of advisers already in their networks to grow and sharing in a growing revenue stream (through variable licensee fees), or by sharing in the profits that come from delivering financial advice through equity ownership in advice businesses.

The Group of 50