After several years on the acquisition trail, Genesys Wealth Advisers will focus on practice development as its growth master plan, hoping to lock advisers in with lucrative new profit sharing arrangements.
In a restructure, member firms under the Challenger Financial Services Group subsidiary will be charged $25,000 a year for a typical single shopfront, two adviser practice.
This represented a maximum additional increase of $10,000, Challenger Financial Planning chief executive Greg Kirk said.
Practices with an additional shopfront will be charged an extra $10,000 to cover costs such as professional indemnity insurance.
However, from July 1 member firms will be paid a proportion of the revenue from up to 20 rebate-paying platforms.
“The new remuneration model is about aligning value around revenue schemes. The majority of [member firms] will be better off,” Kirk, formerly AMP Financial Planning managing director, said.
Member firms receive 20-40 per cent of the rebate, depending on how much business they write.
Genesys had switched its focus from recruitment to internal growth, Kirk said.
It has formed relationship, practice development and advice teams to help make practices more profitable and improve advice quality.
Genesys Wealth Advisers director Andrew Creaser said it had increased the number of professional support staff.
“One of the benefits is that they can be more specialist in their focus. In the practice development stream they will help advisers with business strategy, operational excellence, and in the system stream they’ll be upskilling firms to use technology as an enabler,” Creaser said.
Genesys advisers have a charter of independence that binds advisers to act in the best interests of their clients.
“There are no bonuses, or targets on sales – it’s a service first ethos,” Kirk said.
Genesys has 400 advisers in 160 member firms and $10.3 billion in funds under advice.
“Our aim is to grow the business and deliver value to Challenger shareholders,” Kirk said.
“We never expected to exceed the hurdle rate of a return of 18 per cent per annum in the first two years, but we aim to achieve that by 2009.”
