Hartley puts his stamp on Insignia

ANALYSIS

The key element in the announcement around the restructure of Insignia Financial is that each of its four new divisions will be expected to perform on their own merits.

In the half-decade since Insignia (formerly IOOF) acquired the MLC Wealth and the ANZ Pensions and Investments business the company has run on a somewhat traditional model, particularly as it sought to bed down what were and still are significant business acquisitions.

Worth noting is that in January 2020 the IOOF/Insignia share price was $7.53 and today it is sitting at $2.33.

However, by implementing a structure which sees four “dedicated lines of business” Insignia’s chief executive, Scott Hartley, looks to be creating a construct with the flexibility to allow businesses such as financial advice to be floated off or sold.

The dedicated business lines are Asset Management, Superannuation (Master Trust), Wrap Platform and Advice.

What every financial adviser working under an Insignia license already knows is that the company has already put the building blocks in place to hive off its advice business with the stepping stone having been its advice services partnership model.

It is probably also worth reflecting that Hartley’s announcement of the restructure followed on from a newspaper report that Insignia was preparing to field expressions of interest from private equity players – something which the company almost instantly denied to the Australian Securities Exchange (ASX).

Recent market experience suggests that significant PE players will remain interested in Insignia or, at least, elements of the business.

What is interesting about the new executives that Hartley has brought in to lead the reshaped Insignia business is the fact that most have spent time at either AMP Limited or Suncorp.

Renee Howie who will be overseeing the advice business has been Chief Marketing Officer at AMP, Jason Sommer who is to become Chief Operating Officer has a background in AMP, Sunsuper and NAB, Liz McCarthy who will be running the Wrap Platforms Business also has a marketing background including at Macquarie Group.

Leaving the business are Chief Operating and Technology officer, Frank Lombardo, Chief Distribtion Officer and Head of Superannuation, Mark Oliver and Chief Client Officer, Chris Weldon. All three men were integral to bedding down of Insignia’s MLC Wealth and ANZ P&I acquisitions which took place under former chief executive, Renato Mota.

When Hartley left AMP to take up the CEO role at Insignia it was predicted he would seek to prove a point around structure and strategy. He has taken the first step but the proof of the pudding will be in the eating.