Insignia draws line between employed and self-licensed advisers
Insignia Financial has moved to better differentiate its employed financial advisers from those who are self-employed or self-licensed.
In an update to the Australian Securities Exchange (ASX) today, Insignia said that it would be changing the naming conventions to describe the Advice channels to Professional Services (employed) and Advice Services (self-employed and self-licensed) in order to improve understanding of the differences between the channels.
It said the Professional Services channel would comprise Shadforth Financial Group and Bridges and would operate as a business to consumer model employing advisers to provide advice directly to clients on a fee for service basis.
“The integration of MLC Advice into Bridges and subsequent reshaping of the service proposition has seen a reduction in adviser numbers following alignment of resourcing models,” it said. “This is expected to result in short-term revenue reduction as low fee-paying clients are moved off fixed term service agreements.”
Insignia said revenue through the Professional Services channel would be derived from fees paid directly to Advised clients with Bridges fees being fixed and based on services packages, while SFG adopted a hybrid fixed fee and asset-based fee.
It said the Advice Services model would provide business to business advice as a service to self-employed advisers operating under the Insignia Financial Group license as well as self-licensed advisers operating under their own license.
“Revenue from the self-employed channel comprises both fixed and revenue sharing models with a practice fee forming the basis and incremental revenue coming from the additional authorised representatives,” it said.
“Within the self-licensed channel, advice firms pay fixed fees based on the services they elect, charged at a practice level with additional incremental revenue per AR.
Next step is removal of Insignia licensed self employed advisers altogether. They will need to become Insignia employees or get their own licence.
As with some of the changes at AMP, this is the market gradually and belatedly responding to the unworkable regulatory construct of “authorised representatives”. In practice it’s impossible for licence holders to provide sufficient control and monitoring over advisers that aren’t directly employed by them. Self employment is fundamentally incompatible with high levels of control and monitoring. Hopefully the ALRC Review will fix this problem properly, by removing the “authorised representative” option altogether.
What a DUMPSTER FIRE!!!! Love the quote, “This is expected to result in short-term revenue reduction as low fee-paying clients are moved off fixed term service agreements.”
What this really means is they are “DUMPING” clients into orphan land and the “short-term” part is where the jack up the fees for whoever remains worthy of their services. hahahaha great work Darren and Renoato
Yes, this will be yet another decline in the availability of professional financial advice to consumers. But Darren & Renato are just responding to the regulatory environment.
Adele, Greg, Kelly, Kenneth, Josh, and Jane, are the real rogues gallery that destroyed access to professional financial advice for the majority of Australian consumers. They all claimed to be improving things, but their bias, incompetence, and personal vested interests, ended up doing far more harm than good for consumers.
Thats Fergusson, Metcalf, O’Dwyer, Hayne, Frydenberg and Hume in case you’ve been focussing on other things…
Imagine you are a business owner and your licensee describes you as a “low fee-paying client.” What is evident is that licensees just exist solely to milk advisers in the quest for fees. In reality the whole AFSL system should not be applicable to qualified advisers and self-licensing used.