Love on the rocks for advisers, dealer groups

Financial advisers are rejecting vertical integration and are prepared to vote with their feet in what could be a death knell for the long-running trend towards consolidation in the industry.

Pinnacle Practice director, Anne Fuchs, who launched My Dealer Group in Brisbane last month, says there is a sense of urgency to many of the adviser inquiries she is fielding.

My Dealer Group is a matchmaking service designed to help advisers looking for a new licensee.

Fuchs believes this desperation is being fuelled by frustration and a desire to run their practices in their own way.

“It’s love on the rocks for these advisers – they have clearly fallen out of love with their licensees,” she says.

“The passion has gone, they’ve outgrown their current licensee and are looking for a new relationship to energise and motivate them.”

While Fuchs is reluctant to single out any particular dealer group potentially facing a mass exodus, she says those that claim a semblance of independence while pushing a parent company’s product are most at risk.

“In my experience, advisers have lost patience with recruitment calls and vertical integration,” she says.

“Most just want to make a final decision and get on with business with a like-minded licensee.”

Loyalty payments are a particular area where advisers are seeking guidance.

The My Dealer Group service offers independent licensee/adviser compatibility assessments.

Licensees pay a fee to become a member of the My Dealer Group panel and their offering is then showcased to the advisers identified as most suited to their businesses.

Fuchs says she is fielding inquiries from advisers all over Australia who are in relationships with a range of licensees.

“We’ve had advisers call us from most of the mainland capital cities but also from regional areas in Western Australia, Tasmania and Queensland.

“And we’re not just taking inquiries from the small end of town. We’ve also seen interest from some well-established and very big adviser practices.”