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Challenger embarks on platform squeeze

By Madeleine Collins
 — 1 minute read
New platform deal negotiated for dealer group.
Challenger Financial Planning is making a select group of platforms pass on their fees to its subsidiary Genesys Wealth Advisers in exchange for access to investors.

Six platforms have agreed to distribute between 10 and 30 basis points based on funds under advice to Genesys Wealth Advisers (Genesys), which shares those fees and commissions with its financial planners.

Participating platforms include St George Bank's Asgard, Westpac's BT Wrap, the Commonwealth Bank of Australia's First Choice, ING's One Answer, IOOF's Pursuit Select and Challenger's own Synergy brand.


"We...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," Challenger Financial Planning managing director Greg Kirk said in the company's annual report released yesterday.

Kirk told InvestorDaily that the new terms would enable advisers to keep prices down for their clients.

"Scale arrangements provide this," he said.

Genesys offers its advisers a suite of around 16 platforms to choose from and does not get fee rebates from underlying fund managers.

Kirk said it was up to the adviser to manage any conflicts of interest that might arise from an increase in revenue between one platform over another.

A new remuneration scheme was designed during the year to improve profit arrangements between Genesys firms and the James Packer-backed financial services group.

"More than 95 per cent of Genesys advisers, as measured by value to Challenger, have accepted these new terms and are operating within the new model," Kirk said.

Kirk left the top job at AMP Financial Planning last April and took over from Ray Miles to run Challenger's advice business.

During this time there has 30 per cent staff turnover in the division, which now has 200 staff.

Specialists have been hired in the areas of risk, estate planning, employee-sponsored superannuation, relationship management, marketing and systems.

Funds under advice grew 32.7 per cent during the 2007 financial year.

Challenger embarks on platform squeeze
New platform deal negotiated for dealer group.
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