Angus Benbow
Leading provider of advice and business services to financial advice firms, Centrepoint Alliance Limited (ASX: CAF), has announced strong growth during FY20 including an increase of 11% in gross revenue and a 61% increase in adviser fee revenue.
Announcing its full year results Centrepoint Alliance said while the operating environment had been unprecedented, conditions have provided significant business opportunities as the need for advice and the transformation of advice delivery gathered pace in the second half of the financial year.
Key FY20 highlights include:
- Gross revenue up by 11% to $131.0m, driven by strong growth in new advisers and significant increase in average gross revenue per advice firm.
- Adviser fees increased by 61% to $10m, with the average annual adviser fee growing by 84% to $36k, continuing the transition to a sustainable recurring fee model.
- Strong 2H20 result, with gross profit up $1.1m and management expenses down $2.0m on 1H20.
- Adviser recruitment running at record levels, onboarding 79 new advisers (up 16% from previous record growth in FY19).
- Licensed adviser base increased by 6% to 317 in a market that has contracted 13% in the past 12 months.
- Low churn, retaining 83% of advice firms under new FY20 pricing structure from 1 July 2019.
- Acquisition of leading advice technology firm, Enzumo, completed in June 2020 for $1.5m.
Mr Angus Benbow, Centrepoint Alliance CEO said the results affirmed the Strategic Refresh that Centrepoint Alliance had embarked upon in early FY19 to reposition for growth. The strategy focuses on advice and business services, leveraged through new data and digital tools, and a new transparent pricing model.
“FY20 has been a busy and successful year for Centrepoint Alliance. The conditions of our operating environment have presented challenges which are significant, but I am pleased to report that these same conditions have provided opportunities for us to demonstrate value to our adviser community,” said Mr Benbow.
“We are particularly proud to have delivered recurring growth which has accelerated in H2 FY20, providing tailwind momentum heading into 2021.
“Through our strategic transformation we have developed an increasingly attractive suite of services, which has empowered us to attract new advisers to the Centrepoint Alliance community at a record rate, despite the financial advice market shrinking overall.
“A key priority has been to improve the quality and breadth of our technology offering and we took an important step forward in this regard with our acquisition in June 2020 of the Enzumo financial planning technology solutions business.”
Mr Alan Fisher, Centrepoint Alliance Chairman, said as the wealth management industry has undergone structural change, the strategic path that Centrepoint Alliance has chosen has placed the Company well to capitalise on disruption in the sector.
“The need for quality financial advice has never been more pressing, and we were pleased to recruit record numbers of new, quality financial advisers in FY20. Centrepoint Alliance is an increasingly attractive adviser destination with a growing reputation for integrity and leadership,” he said.
Looking ahead to FY21, Mr Benbow said Centrepoint Alliance was well positioned to take up opportunities, particularly as smaller licensees seek to adapt their business models following a once-in-a-generation industry transformation.
“Our areas of focus for the year ahead are to continue to attract high quality licensed and self-licensed firms to the Centrepoint Alliance community, enhance the value of our scalable service platform, and actively explore industry consolidation opportunities,” said Mr Benbow.
“We enter FY21 well-positioned to achieve these goals with a robust, cash-generative and scalable platform, backed by the balance sheet strength to grow quickly and opportunistically. In addition, our adviser community has confirmed to us they are extremely satisfied with Centrepoint Alliance and our ability to fully support them in the areas they value most.”