Licensees fast becoming the biggest client book brokers

Mike Taylor

Managing Editor/Publisher, Financial Newswire

28 October 2022

It’s been happening with AMP Limited for years and within some of the mid-sized financial planning dealer groups as well, but Insignia Financial chief executive, Renato Mota, has clearly spelled out the reality that licensees continue to internally broker client books to retain funds under advice (FUA).

At the same time as financial planning business broker, Paul Tynan was telling Financial Newswire that orphan clients were the fastest-growing cohort in the profession, Mota was outlining what Insignia has been doing to retain clients and therefore FUA.

Acknowledging that Insignia had been losing advisers over the past 12 months, he said it had nonetheless maintained its market share and a part of that was owed to the company continuing to broker internal mergers and acquisitions transactions.

Tynan said that what was occurring within Insignia was common across the financial planning sector as the licensees sought to retain quality clients.

The practice was also confirmed by Infocus Wealth Management chief executive, Darren Steinhardt who said it was absolutely something which occurred within his company.

“Frankly, there are more buyers than there are sellers,” he said.

“If the client is a good fit then it something which its culturally very easy to do, Steinhardt said.

In Insignia Financial’s quarterly update to the Australian Securities Exchange, Mota said that the company had maintained adctive advice services relationships with 1,570 financial advisers as at 30 September.

“This represents a quarterly reduction of 30 advisers, primarily from the self-employed channel, consistent with declines seen across the broader advice market,” he aid.

“Whilst the level of departures has moderated compared to recent quarters, there continued to be some movement in the self-employed channel with a number of practices opting out, primarily through selling their client books or transitioning to a self-licensed model.”

“Some advisers also relinquished their authority with the expiry of the FASEA exam deadline.”

“Insignia Financial continued to broker internal M&A transactions, retaining some of the sold client books with pre-existing practices in the Insignia Financial licensees.”