Going Solo

Almost one third of financial advisers are considering switching licensee within the next five years, with one quarter of those with itchy feet leaning towards setting up their own AFSL.

CoreData’s annual Licensee study has revealed that while the prospect of adviser churn is low in the short term (only 14.7% of advisers are considering moving dealer group in the next 12 months), licensees would be foolish to rest on their laurels.

The research, which garnered more than 1000 responses from advisers across the industry, found 31.7% were likely to switch to a new licensee in the next five years.

But while dealer heads may view this as a recruitment opportunity, it appears advisers are more likely to go it alone than to seek comfort in the arms of another licensee.

Of those who gave a rating score of 6 or above (on a 0-10 scale) when asked how likely they were to switch licensee in the next five years, more than a quarter (26.2%) said they were considering switching to their own AFSL.

As the institutionally-owned dealer groups continue to grow in both market presence and dominance, some advisers will undoubtedly rebel against the wave of consolidation by setting up shop on their own terms.

The surprise decision by the ACCC on Monday to oppose NAB’s bid for AXA Asia Pacific and instead give a green light to AMP to acquire the group’s Australia and New Zealand arms is further evidence of an industry on the brink of change.

The decision is a blow to NAB, which has been on an aggressive acquisition path over the last two years and was the preferred suitor in the eyes of the AXA Asia Pacific independent directors.

If successful in securing the deal, AMP will have to work hard to win over AXA advisers, but doing so would ensure the merged entity is a force to be reckoned with in Australia’s planning industry.

*The results of the Licensee Study will be published in Money Management and form part of the magazine’s Dealer of the Year Awards