Australia’s dealer group landscape underwent a sizeable shift in the first six months of the year.
Volatility has crashed through international markets at a breakneck speed, leaving some companies bruised but still in operation and others struggling for day-to-day survival.
At a more localised level, dealer licensees are in turmoil because of the financial climate, increase in cost of compliance and the potential loss from bad advice.
As a result, there was a fair amount of movement within the dealer group sector in the six months to June 2008, with a number of institutions swooping on acquisition opportunities, the IFA Dealer Group Survey has found.
In November last year, ING announced it had purchased privately-owned dealer group Financial Services Partners (FSP). The purchase enabled ING to merge its existing dealer group Tandem Financial Advice with FSP.
Fellow ING-owned dealer group Millennium3 also made a number of acquisitions in the first six months of the year.
In May, the firm acquired Financial Lifestyle Solutions from Zurich Australia and then in June purchased Pinnacle Partners.
“Millennium3 has been on a growth path and strategy over the last three years,” ING general manager of allied distribution Charles Smith said.
“They’ve built up very good capability of value-added services to advisers and basically they had scale to take on more advisers and so with that they have taken an acquisition focus.
“We were very fortunate that there were a number of very good opportunities in the marketplace that fitted very well into the Millennium3 group.”
While Millennium3 was the most openly aggressive purchaser in the first six months of the year, one of the most intensely watched dealer group transactions was the sale of Genesys Wealth Advisers to Axa Australia.
Challenger Financial Services sold Genesys to Axa Australia in late June.
Not only was Genesys embroiled in a legal battle with a former division managing director over his unsolicited offers for member firms, bonuses passed on to Genesys executive staff post the sale ruffled more than a few adviser feathers.
However, despite rumours of a number of member firms planning breakout groups, the dealer group’s new parent, Axa, has pushed ahead with new initiatives for their new advisers.
Last week, Axa’s Financial Advice Network (FAN) rolled out an initiative it anticipates will increase revenue of its member firms by $63 million over the next five years.
“Genesys will continue to run as a stand-alone business and both Axa and Genesys are satisfied with the progress of the transition. Since the change of ownership we have seen a steady increase in the number of Genesys advisers,” an Axa spokesperson says.
“Given Axa’s wide-ranging adviser proposition, Axa continues to be approached by external firms that are attracted to our extensive support model. The number of advisers wanting to join Axa is greater than it has ever been.”
New entrants have also emerged in the survey, with Shadforths proving the standout.
The planned dealer group for financial planning collective The Best Advice Project, Shadforths bucked the industry trend and financial markets and steamed ahead with its plan to merge 11 firms.
The firms are Arnheim Gillard and Partners, Gannon Growden Schonell and Associates, Guest McLeod, Heraud Harrison, Keysbrook Financial Services, Douglas Wenck, Ellwood Barry McPherson, Kilkenny Rose, Shadforths, Haintz and the Money Managers.
As well as merging 11 firms, a number of the groups underwent rebranding in July.
Sydney-based groups Taylor Shadforths and Guest McLeod will merge and be rebranded as Shadforths Guest McLeod.
