Insignia announces adviser equity advice approach
Insignia Financial has announced a new financial advice operating model via the creation of a new business.
The new business approach has been announced in Insignia’s quarterly update to the Australian Securities Exchange (ASX) with its chief executive, Renato Mota saying that the business would initially be majority owned by Insignia but, over time, advisers would be offered an equity stake.
He said the ambition was to create an adviser-owned business.
Mota said the changes to Insignia’s Advice Services business would provide it with a clearer, more innovative, and sustainable value proposition, through a new partnership ownership model for its self-employed licensees comprising RI Advice Group Pty Ltd (RI), Consultum Financial Advisers Pty Ltd (Consultum) and TenFifty.
His statement said that while the new brand name and identity has yet to be established, this new business is being developed under the working name of Advice Services Co, or ASC (“ASC”).
“ASC represents the ambition to create Australia’s largest adviser-owned licensee group, positioning it to capitalise on the dynamic self-employed advice market with the support of Insignia Financial. ASC will operate with independent management, oversight and governance, with input from both Insignia Financial as well as key advice practice representatives.”
“Initially, Insignia Financial will hold a majority stake in ASC reducing over time as advisers are invited to receive equity in ASC. Insignia Financial’s continued shareholding will ensure alignment and commitment to the self-employed advice model through an ongoing partnership. ASC will have a strong mandate to grow the number of advice practices and advisers operating under its licences.”
Commenting on the new arrangement Mota said, “This is a transformational initiative for our Advice offering and will accelerate the return to profitability of our Advice business, while ensuring our Advice Services model is positioned for growth as the financial advice industry continues to evolve.
“ASC will be owned and run for advisers, with the backing and support of Insignia Financial. The formation of ASC creates an adviser focused licensee that can innovate in support of an emerging high quality, self-employed profession.”
Product companies are fast figuring out that partial ownership of advice practices is a better method than licensing advice practices, in order to ensure those practices recommend the product company’s product.
Regulators will figure it out too, in about 20 years.
This is great news for the Consultum & RI Advisers
Licensee runs at a loss, and want to switch that so advisers are now wearing the loss, via their equity buy-in provision? So Insignia get to stem their losses on the licensee side and share in any upside on the adviser practice side. Do I have this right?
Trust this lot as far as I could throw them after the mistreatment of so many good advisers in their misguided attempt to eradicate self-employed advisers. This appears to be an admission of long-term failure on the part of senior IOOF mgt – rebranding hides nothing.
IOOF, the new AMP!
Buying a hollow drum.