Growth in small to medium financial planning practices continues despite some gloomy forecasts, according to Paragem Dealer Services.
The financial services firm recently assisted independently-owned advice practice, Financial Success Australia, to acquire another unnamed boutique firm. Both operate under Paragem’s wholesale Australian financial services licence.
The merger of the Sydney-based financial planning firms brings together a client base of $150 million in funds under management and a business model that is migrating all clients into a fee-based advice model.
Paragem would provide licensing as well as ongoing dealer services and back-office support for the combined entities, managing director Ian Knox said.
“Our licence is ideal for practices seeking high quality dealer support without any conflicts of interest while accessing Paragem’s scale and professional support,” he said.
“The licence structure is experiencing increased enquiries from planning practices and accounting firms in light of the changing regulatory environment.
“This issue is particularly pertinent for accounting practices wishing to follow the accounting code of conduct wherein volume bonuses are discouraged, even at dealer level.”
Paragem’s licence enables advisers access to platforms at nil volume bonus rates and also rebates 100 per cent of any volume bonus when a platform is unable to credit client accounts, Knox said.
“We firmly believe that our dealer services business offers independent financial advisers (IFA) the opportunity to access the operational scale and expertise required to survive as SMEs (small and medium enterprises),” he said.
“We think the survival and profitable growth of IFAs is a real value proposition for consumers.”
