Competition for financial planning practices has become tougher as more dealer groups offer sign-on bonuses to advisers willing to make the jump, according to Financial Planning Services Australia (FPSA).
"There are dealer groups out there that pay sign-on fees - they are paying a company to join the dealer group. We have come across that on numerous occasions now," FPSA chief executive Mark Ryan said.
"It's not something that we are planning to pay. We are there to help an adviser build an asset in the long run and that is much more valuable than cash on the table."
The financial crisis has made financial planners more reluctant to move their practices, as they feel there is a higher risk of losing clients in the process.
But sign-on fees have in some cases proven to be an incentive to change.
One dealer group that has offered sign-on bonuses in recent months is Australian Financial Services (AFS).
After a proposed merger with Total Financial Solutions Australia (TFSA) fell through in February, AFS has targeted individual TFSA practices.
"AFS adopted the strategy, but only as a once-off tactical ploy to target selected TFSA practices," AFS managing director Peter Daly said.
AFS offered advisers $30,000 for an increased administration workload and potential loss of revenue.
But some form of assistance offered to planners who were migrating their client base was not unusual, Kenyon Prendeville principal Stephen Prendeville said.
"That assistance might be in the form of marketing, it could be in the area of administration, or it could be a discount on a dealer fee," he said.
"The current environment is extremely difficult in terms of risk around client retention and therefore there needs to be a reward for it to happen."
