Guardian Advice has announced a revamped succession strategy with tweaks to its buyer of last resort (BOLR) arrangements, while also increasing its number of advisers well ahead of prior plans.
Addressing a media briefing, Guardian Advice executive manager Simon Harris said Guardian Advice will be providing greater support in helping younger advisers take a stake in established businesses through equity partnering, as well as providing office space and back office support.
“There are a lot of baby boomers getting ready to retire and generally, due to the growth and success of those businesses, Gen X and Y advisers are not able to access the capital to take over those practices,” Mr Harris said.
The group has been working with those senior principals on their succession planning and will be announcing its first equity partnership within the next eight weeks. In addition to taking a minority stake to aid the transfer of wealth, the group also provides back office help and statement of advice generation, he added.
“We’re also providing the physical office for new advisers to join – so it will be a model Guardian office where there will be office space for up-and-coming junior advisers, but we’re also tying that in with our buyer of last resort,” he said.
This means Guardian Advice will buy books of clients back from advisers under BOLR arrangements, start splitting up those books and using them to help some of the newer advisers get started.
“So not only will they get office space and the mentoring opportunity through working with a senior adviser, they’ll also have a book of business and some clients to work with,” Mr Harris said.
Partly through recent successions, the group has reduced the average age of its advisers from 58 to 49 in the two years to December 2012, which Mr Harris said was important to the group’s sustainability.
Mr Harris also provided an update on the group’s growth strategy, which was originally to target 200 advisers by 2015 with 160 by June 2013.
“We’re going to significantly exceed that; we’ll be probably 20 per cent at least in excess of that 160 milestone,” he said.
He attributed this partly to the group’s proposition as an institutionally-owned risk specialist dealer group as well as regulatory changes and consumer sentiment. “There’s a real flight to security and we’re benefitting from that,” he said.
The recent move by the Australian Securities and Investments Commission (ASIC) to revoke the licence of AAA Shares and AAA Financial Intelligence meant there were 150 advisers looking for a new licensee and Guardian was able to cherry pick the ones it wanted. While it was too early to say how many AAA advisers would join, Mr Harris anticipated less than 40 per cent.
