Challenger Financial Planning (Challenger) is on track to reach returns on net assets of 18 per cent by 2009.
According to Challenger’s annual report, the planning division of Challenger Financial Services has rebounded strongly following a restructure with funds under administration jumping 21.1 per cent and funds under advice increasing by 32.7 per cent.
The growth translated to an increase in both income and earnings of 14 per cent, the report said.
“During the year, we continued to realise value from non-core activities through the sale of our 25 per cent shareholding in corporate superannuation business Finium,” Challenger Financial Planning chief executive Greg Kirk said.
“We also negotiated new financial terms with a group of platform partners, designed to improve the revenue generating capabilities of these arrangements for the benefit of our member firms.”
Kirk said the focus of the year was to establish a basis for future growth and implement findings of the group’s recent strategic review.
“The findings set out a new framework to take the business forward, noting that there was a clear opportunity to enhance or ‘industrialise’ the operational components of the advice business, Genesys Wealth Advisers,” he said.
The review also identified an opportunity for the advice business to work more closely with Challenger’s administration business, Synergy Capital Management.
“We continue to invest in Synergy to ensure these opportunities are maximised. As a consequence of this review, we determined that if we were to succeed in our new model it would be important to restructure the leadership team. This process was designed to bring in new expertise and capabilities to deliver on the objectives established in our findings,” Kirk said.
“We are in the process of implementing our new business model for Genesys. Our approach to service delivery and a new segmentation model for member firms ensures services are delivered to achieve optimal impact. This includes the standardising of essential services offered to member firms, as well as the introduction of additional services designed to enhance client outcomes and optimise efficiencies within practices.”
For the listed financial services company overall, Challenger recorded a net profit after tax of $255 million for the full year to 30 June 2007, an increase of 90.3 per cent on the prior year.
