Services and equity stakes the future for advice licensees

Mike Taylor

Managing Editor/Publisher, Financial Newswire

4 May 2023

Financial services firms previously primarily seen as financial planning licensees are changing how they present themselves – from licensing authorities to equity partners and service providers.

The shift in emphasis has been underscored by Sequoia Financial Group which has told investors that “Sequoia’s market or core client is any person or business that acts as an influence of an end consumer’s financial decision”.

The bottom line is that while Sequoia licenses 370 advisers under Sequoia Wealth Management (SWM), Interprac Securities and Family Office Advice it is looking to broaden the market for its services further.

The company described its customer group as being advisers, advice clients, financial advice licensees, accounting practices, higher net worth consumers and fund managers,

It told investors that, currently, Sequoia has less than 5% of what represents a very substantial market and that “there should be no reason that Sequoia cannot provide service to any of this market and has set an internal goal of providing at least one service to 15% of the adviser and accountancy practice market by 2026.

“At present we act as licensee for 367 of the 15,872 advisers on the Financial Advice Register,” Sequoia said, claiming this represented 2.3% market share with the aim of growing to more than 4% market share by 2026.

The Sequoia strategy compares to that of players who are basing their approach on either taking equity stakes or delivering services to advice practices or a combination of both.

Amongst the players taking equity stakes are Count Financial via is so-called owner-driver approach, Paul Barrett’s AZ-NGA, Centrepoint Alliance and Fitzpatricks.

Commenting on the development AdviceIQ general manager, Paul Harding-Davis said he believed the change in approach was being driven by the increasing professionalisation of financial advisers.

“Increasingly, advisers are looking at what is being provided by licensees and whether it fits with what they value,” he said.