Insignia claims adviser exits driven by end to subsidies
118 financial advisers and 59 practices exited Insignia (IOOF) as at 31 December, according to a company update provided to the Australian Securities Exchange (ASX) today.
The company said the total number of advisers in the Insignia Financial net work was 1,756 as at 31 December, with adviser numbers having decreased by 118 for the quarter, primarily through the loss of smaller practices in the self-employed channel.
It said the number of practices in the self-employed channel decreased by 59 to 480.
The reductions in the number of advisers came against the background of the company funds under management advice rising by $4.7 billion to $325.8 billion supported by $2.3 billion in quarterly net flows.
The firm also noted that $22.1 billion and 93,000 accounts successfully migrated to its Evolve platform which is now administering over $42 billion in client assets across 298 accounts.
Discussing the advice business, Insignia chief executive, Renato Mota said the reduction in self-employed adviser and practice turnover was mainly the result of the reset in management fees charged by IOOF to self-employed advisers from 1 October, last year.
He said the revised fee model removed historic subsidisation of fees and supported the firm’s target for ANZ aligned licensees to break-even on a run-rate basis by 30 June, this year.
“Most adviser departures came from smaller practices in the self-employed channel that were unable to transition to a new sustainable advice model,” he said.