Speaking to InvestorDaily, Centrepoint Alliance managing director John de Zwart said the claims team has been brought in-house, with the recent addition of two fulltime staff as the business “goes hard” on the use of consultants - something that has saved the company "millions".
Centrepoint is attempting to resolve the majority of its claims in-house rather than going through the courts or the Financial Ombudsman Service (FOS), he said.
“There are only three cases currently in the courts that we're using lawyers for,” said Mr de Zwart.
"The aim is to try and keep the lawyers out of it, try and keep FOS out of it – just simply deal with the client's issue, apologise if we need to and move on," he said.
But PIS is still experiencing legacy claims that date back to the global financial crisis – before the dealer group's parent company Professional Investment Holdings was acquired by Centrepoint in 2010.
“We’re still currently seeing the issue of claims. None of us feel proud about that – and none of us want to go back to that,” he said.
Centrepoint has had “stripes carved into its back” and has gone through the "pain" of PIS's poor claims experience, which has seen the firm continue to provision millions of dollars for future claims – ensuring PIS remains unprofitable.
“It’s not something that’s a proud moment for us, and we’ll live with that for a long time. [Claims are] part of our DNA now and we leverage off that,” said Mr de Zwart.
The claims team is now "very respectful and customer-centric", he said.
"From my experience at TAL if you treat people like they’re going to defraud you then you’re going to get the worst outcomes. If you treat people like they’ve actually got an issue it's much faster, simpler and cheaper," said Mr de Zwart.
PIS concluded an enforceable undertaking with the Australian Securities and Investments Commission (ASIC) in March 2012, he said – and a recent review left the regulator very satisfied with the group's advice processes.
As part of the new compliance structure, Centrepoint has overlayed the processes of its AAP businesses over PIS, said Mr de Zwart – a marked improvement on PIS's previous practices.
At the point Centrepoint acquired PIS, the business was “in pretty serious decline [and] the relationships with the advisers had been broken”, said Mr de Zwart.
Mr de Zwart moved into the managing director role at Centrepoint in April 2013, largely thanks to his history of pulling off similar 'turnarounds' at TAL and AMP.
But he arrived to find PIS haemorrhaging advisers and revenue.
“At any business like that, obviously management has lost control of the relationships,” he said.
“It's about re-centring the business and trying to provide good propositions to firstly our [advisers], but also our staff,” said Mr de Zwart.
In terms of adviser numbers, PIS has gone from a peak of 1,400 in 2010 to “around 500” advisers (translating to about 350 practices) today.
But despite the continuing leakage of planners, Mr de Zwart said he is completely focused on growing the existing practices rather than recruiting new advisers.
“I don’t even have any time budgeted or headcount allocated to recruitment. That's not the goal. If we can grow our practices at 20 per cent per annum we’ll grow at 20 per cent per annum,” he said.
