John Shuttleworth

Centrepoint Alliance enters agreements to acquire Cairns Wealth and Pinnacle Wealth client books Centrepoint Alliance Limited (ASX: CAF) (“Centrepoint” or “the Company”), a leading provider of advice and business services to financial advice firms and customers throughout Australia, is pleased to announce that it has entered into agreements to acquire the client books and servicing employed advisers of Cairns Wealth and Pinnacle Wealth (together, the “Acquisitions”), further expanding its salaried advice business and supporting the growth of high-quality, recurring earnings.

Both practices operate within the Astute Financial Management Pty Ltd (“Astute”) network, and the transactions further strengthen Centrepoint’s strategic B2B alliance with Astute, a key referral and distribution partner. The Acquisitions reinforce Centrepoint’s disciplined capital deployment framework, targeting high-quality, recurring earnings streams, aligned operating models and strong adviser retention characteristics.

Strategic rationale

• Expanded Queensland distribution footprint: The acquisition of Cairns Wealth establishes Centrepoint’s presence in all major regional centres across Queensland, further strengthening its national advice network.
• Strengthening strategic partnership with Astute: Both practices operate within the Astute network, continuing to deepen Centrepoint’s strategic alignment and referral pathways with Astute.
• Scalable integration model: Cairns Wealth advisers will operate from Astute premises in Cairns, and Pinnacle Wealth advisers will be integrated into Centrepoint’s Brisbane office.
• Earnings quality: The Acquisitions are underpinned by established recurring earnings and current adviser productivity, with retention structures designed to support continuity of earnings.

Funding

Centrepoint confirms that National Australia Bank (“NAB”) has approved a new acquisition facility of $10 million with a five-year term. This facility provides flexibility to fund the Acquisitions and supports the Company’s ongoing M&A strategy.

Integration and operating model

Both Acquisitions are structured as complementary transactions with limited integration complexity. Advisers will transition on to Centrepoint employment arrangements.

Centrepoint Alliance Chief Executive Officer, John Shuttleworth said: “These acquisitions represent attractive strategic opportunities aligned with our disciplined capital deployment framework. Importantly, they strengthen our partnership with Astute, complete our Queensland regional footprint and are expected to deliver high-quality, recurring earnings and immediate earnings contribution.

We remain focused on executing our growth strategy through acquisitions, adviser recruitment and expansion of our platform and investments businesses.”

Timing

Completion of these transactions is expected by 1 July 2026 and is subject to execution of all associated documents and standard regulatory and operational transition processes, including the advisers joining Centrepoint.

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John Shuttleworth

Centrepoint Alliance Limited (ASX: CAF) (“Centrepoint” or “the Company”), a leading provider of advice and business services to financial advice firms throughout Australia, is pleased to provide the Company’s Interim Financial Report and Appendix 4D for the six months ended 31 December 2023.

H1 FY24 Financial Highlights

• Strong financial performance, achieving normalised EBITDA (excluding LTI awards, one-off costs and asset sales) of $4.1m, up 11% (+$0.4m) from H1 FY23 driven by a robust mix of organic growth and recent acquisition of Financial Advice Matters Group Pty Ltd (FAM) completed on 1 December 2023
• Interim fully franked ordinary dividend of 1.0c declared on 23 February 2024 with a payment date of 18 March 2024
• Gross revenue increased by $6.3m (+4.7% on PCP)
• Management expenses flat on PCP (down 2.4% on PCP excluding FAM acquisition). Cost to income at 75% improved over PCP due to gross profit increase
• Cash of $12.4m, down $3.2m from June 2023 primarily driven by $3.7m net cash flow from operations and $4m loan borrowings offset by $7.6m paid for FAM acquisition and $4m in dividends paid out
• Gross profit up 2.5% (+$0.4m) on PCP primarily through revenue uplift from $0.6m organic licenced fee growth, $0.5m FAM acquisition offsetting $0.4m platform margin cessation
• PBT of $2.4m down $1.3m on PCP primarily due to a one-off $1.6m Asset Sales (Ventura) in PCP. Normalising for PCP Asset Sales, H1 FY24 PBT increased by $0.3m driven by gross profit increase

H1 FY24 Operational Highlights

• The market conditions for advice remain strong with significant demand for advice services, strong equity markets and easing of regulation through a series of reforms arising from the Quality of Advice Review.
• The Group’s total number of advisers is now 1,338 advisers made up of 518 licenced advisers (net growth of +7 over the half) and 206 self-licenced firms (net growth of +10 over the half) representing 820 advisers. This performance is strong relative to peers with only three other licensees (with more than 100 authorised representatives), recording positive growth.
• The recruitment pipelines across the licenced and self-licenced business lines are strong largely driven by the disruption caused by licensee consolidation. Opportunities to recruit advisers will continue to materialise due to disruption in the market.
• The Groups commitment to service excellence is reflected in the Net Promotor Score (NPS), which has increased from +13 in August 2022 to +39 by November 2023. NPS operates on a scale from -100 to +100, with scores above 0 indicating positive sentiment and scores above +50 considered exceptional.

H1 FY24 Acquisition

• The acquisition of FAM was completed on 1 December 2023. FAM is a Queensland-based financial planning group operating in eight locations, providing advice to over 1,550 household clients, with funds under advice in excess of $1 billion. The acquisition is strategically important, creating operating scale in the important higher margin salaried advice segment, with 15 advisers joining the Group creating a national presence of 19 advisers.

Strategic initiatives

• Growing our asset management business is a key strategic priority. A new range of managed accounts, the iQ Portfolios was launched on Macquarie Wrap in December 2023. These portfolios will be progressively launched across other partner platforms. The iQ Portfolios complement the existing range of managed accounts available through Colonial First State FirstChoice.
• CAF and FNZ have entered into a partnership to launch a new platform under the IconiQ brand name. FNZ are a global leader in platform technology with over $2 trillion in funds under administration across with 650 client implementations across 30 countries. Scheduled to launch in Q3 of calendar year 2024, the service will consist of an Investor Directed Portfolio Service and a Superannuation platform. The offer will be competitively priced with no minimum fee, account aggregation and capped fee structure. The new offer will complement the twelve partner platforms available on the approved product list reinforcing CAF’s position as a research driven open architecture provider of platforms and investment solutions.

Centrepoint Chair, Georg Chmiel, said: “As the newly appointed Chair, I am proud to be part of a company that plays such an important role in providing essential services to the financial advice industry. Our executive team has consistently delivered strong results, benefiting from acquisitions, organic adviser growth, and disciplined cost management. The business is well placed with our strong community of advisers providing scale. I am confident, our pipeline of strategic initiatives will deliver future growth as we continue to build our powerful wealth platform.”

Centrepoint CEO, John Shuttleworth, said: “Centrepoint Alliance is at an incredibly exciting phase of its development. The business has significant scale thanks to the trust placed in us by the 1,338 advisers we service. With the current dislocation in the market, we are seeing significant opportunity as advisers look for a licensee they can trust to help them with the services they need to manage their business. The recent acquisition of FAM is an important step to build a larger profitable salaried advice business complementing our licensee services. The pending launch of the IconiQ Platform and iQ portfolios launched in December will further expand the services we can offer our community of advisers”.

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John Shuttleworth

Centrepoint Alliance Limited (ASX: CAF) (“Centrepoint Alliance” or “CAF”), a leading provider of business services to financial advice firms throughout Australia, is pleased to announce it has entered into a binding agreement to acquire 100% ownership of Brisbane based financial advice firm Financial Advice Matters Group Pty Ltd (“FAM”).

FAM offers clients a full range of financial planning and advice services to approximately 1,450 client households with Funds Under Advice (“FUA”) in excess of $1 billion. FAM operates 8 offices throughout Queensland and generated revenue of $6.1m in FY23.

FAM became a corporate authorised representative of CAF subsidiary Alliance Wealth, in 2015. Since then, FAM has grown considerably and has been a strong contributor to the Centrepoint Alliance community. The acquisition of FAM will add significant revenue to CAF, boost CAF’s team of salaried financial advisers to 19, and create a financial advice group with the scale to further expand in other locations.

Key transaction details:

• FAM revenue approximately $6.1m in FY23
• Full year EBIT contribution to CAF in the range of $1.1m to $1.5m in first twelve months of operations
• Total potential consideration of $10m cash funded from CAF’s existing cash reserves and newly established $10m debt facility with National Australia Bank
• 80% of consideration paid upfront and remaining 20% subject to deferred incentives and performance hurdles over a 12-month period based on a minimum EBIT contribution of $1.5m
• Completion expected by 1 December 2023 (subject to fulfilment of closing conditions)

Commenting on the acquisition of FAM, Centrepoint Alliance’s Chief Executive Officer John Shuttleworth said: “I am delighted by the opportunity this acquisition offers Centrepoint Alliance. It fits with our strategy to accelerate growth by executing targeted acquisitions of high-quality businesses aligned to our strategic framework. The FAM Team have a proven track record helping many Australians by providing quality financial advice. FAM is a corporatised advice firm with a strong cultural fit with our existing network of financial advisers and has the business systems, processes and operating scale to provide a platform for further expansion of this important segment of the market.”

Darren Smith, Managing Director of Financial Advice Matters Group, commented: “This is an exciting development and reflects the realisation of our vision since joining the Centrepoint group back in 2015 as a corporate authorised representative. Over the last 8 years we have worked closely with the Centrepoint group and there is strong cultural alignment and mutual respect. The group recognises the cultural strength of what has been built up under the Financial Advice Matters brand and is looking to use it as a platform for further growth.”

The release of this announcement has been authorised by the Board of Directors. Further information on the acquisition of FAM will be provided at CAF’s Annual General meeting to be held on Friday, 10th November 2023.

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John Shuttleworth

Leading provider of advice and business services to financial advice firms, Centrepoint Alliance Limited has announced strong growth during FY21, including a net profit after tax of $1.8m and 6% growth in gross revenue.  The company also announced it has agreed to purchase financial advice businesses of ClearView Wealth Limited for $15.2 million.

Announcing its full year results Centrepoint Alliance said despite a challenging year for the advice industry which saw overall adviser numbers decline further, the group had continued boost its member base, amid increased demand for robust compliance and technology solutions.

Key FY21 highlights include:

• Net profit after tax of $1.8m, spurred by continued revenue growth in advice fees, diligent expense management and an expected run-off in legacy funds and administration.
• Gross revenue up by 6% from FY20 to $138m, driven by strong performance of the licensee solutions business and an increase in authorised representative fees.
• Expenses declined 15.7% from FY20 to $26.5m, reflecting management’s continued focus on cost reduction.
• An adviser base of 315 authorised representatives with strong levels of service satisfaction.
• Self-licensed firms increased by 16, including three new wholesale contracts, taking the total number to 149.  An additional 23 existing firms were transitioned to the new fee for service offer.
• Continued investment in technology to enhance the scalable service platform for advisers, with successful integration of Xplan service provider Enzumo following the June 2020 acquisition

John Shuttleworth, Centrepoint Alliance CEO said: “Centrepoint Alliance is proud to have delivered improvements in revenue and profitability throughout FY21 despite challenging trading conditions.

“When I joined Centrepoint Alliance earlier this month, I found a business that benefits from a very favourable position in a rapidly evolving advice industry, with competitive pricing and capabilities in both the licenced and self-licensed segments.”

Centrepoint Alliance also continued to execute on its strategic priority of offering market-leading technological solutions to advice firms throughout the financial year.

“We know that technology has a clear impact on the profitability and efficiency of our members’ businesses. In FY21 key initiatives included upgrading our CRM system to incorporate business intelligence tools and bedding down the acquisition of Enzumo to enhance our technology and data services,” Mr Shuttleworth said.

“We have also invested in delivering service at scale within our own business, which has resulted in high levels of member satisfaction. Today 93% of enquiries received are resolved within two days, with average turnaround time improving by 20%.”

Acquisition of ClearView Advice

Centrepoint Alliance also announced it will acquire the financial advice businesses of ClearView which include the ClearView Financial Advice Pty Ltd and Matrix Planning Solutions Ltd, and LaVista Licensee Solutions Pty Ltd.

The purchase will be financed by the issue $12.0 million in escrowed CAF shares and a cash consideration of $3.2 million. As a result, ClearView Wealth Limited will become a substantial (25%) shareholder in Centrepoint Alliance.

“This transaction represents the next phase of Centrepoint Alliance’s growth by providing immediate scale and will increase the business’s long-term value and profitability,’ said Mr Shuttleworth.

Well positioned for continued market disruption

Looking forward, Mr Shuttleworth said while continued disruption in the advice sector is expected, Centrepoint Alliance is well positioned to take advantage and will focus on growing its range of licensee solutions to build greater scale and profitability, further investing in technology, and enhancing its portfolio implementation solutions with the goal of keeping costs low.

“We enter FY22 with a positive outlook for growth and look forward to providing quality business services and support to a broader range of financial advice professionals in the year ahead,” Mr Shuttleworth concluded.

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Mr Shuttleworth was previously General Manager of Platforms and Investments at BT Financial Group where he was responsible for $115bn in assets under administration and $40bn in funds under management. John led the development of BT Super for Life, Australia’s first low-cost superannuation product. He also initiated and ran a large-scale technology transformation for the wealth business, BT Panorama involving redefining the product, technology, and service architecture for BT.

Chairman Alan Fisher said “We are pleased to attract an executive of the calibre of John to lead the Company. Over the last three years Centrepoint Alliance has focused on building and strengthening our licensee services through a period of significant industry change. John will lead the Company through our next phase of growth as we focus on expanding our service offering and digitising key services.”

Mr Shuttleworth said “Having the opportunity to lead Centrepoint Alliance through the next phase of growth is a privilege. Over the last few months, I have had an opportunity to consult with the Board and Senior Executive Team. I have been impressed by the calibre and professionalism of Centrepoint Alliance executives and their passion for advice. Centrepoint Alliance has a great culture and is a Company with a strong foundation for growth.”

Centrepoint Alliance is the leading provider of advice and business services to financial advice firms throughout Australia. It offers a complete suite of governance, business management, client growth and advice services that enable advisers to spend more time providing advice to their clients.

In the 12 months to 30 June 2021, Centrepoint Alliance appointed more than 70 authorised representatives to its own Australian Financial Services Licenses. This is a record for the Company, ranking first amongst its peers for new advisers.

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Paul Cullen

Centrepoint Alliance has announced a new fee structure for financial advisers who choose to work part-time, breaking new ground in the Australian market.

The latest research from Roy Morgan shows part-time work is a growing trend, with over 4.3 million Australians currently employed on a part-time basis^[1]. Yet according to Paul Cullen, Group Executive Advice at Centrepoint Alliance, financial advice has traditionally not been viewed as a part-time profession.

“There has been a reluctance to offer reductions in fees for advisers whose personal circumstances suit reduced working hours.

“However, financial advice is no different to any other occupation and advisers should be entitled to be supported by their licensee if they require flexible working arrangements to balance work and family commitments,” he said.

Mr Cullen said he had observed increased demand for part-time opportunities among the advice community in recent years, particularly among working parents and those who have carer responsibilities.

“We believe that offering this new fee arrangement will help to make the financial advice industry more attractive and accessible for all,” he said.

A flexible option

Centrepoint Alliance’s new flexible fee model is available to financial advice firms with more than one authorised representative.

For advisers working part-time, variable costs including governance and research queries, along with technical and compliance support may be pro-rated according to the number of days worked.

Those advisers who are taking maternity or paternity leave will be able to suspend fees in full for up to 12 months, or pay a reduced fee if they wish to retain access to masterclasses and webinars and complete CPD.

“We believe that offering flexibility around fees will not only enable greater diversity in the advice industry but will also provide more options for those firms who may require advice support on a part-time basis,” Mr Cullen said.

———

[1] Roy Morgan employment data series, February 2021

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Angus Benbow

Leading provider of advice and business services to financial advice firms, Centrepoint Alliance Limited (ASX: CAF), has announced that its strong growth trajectory continued during 1H FY21.

Gross revenue for the half was $70.6m – an increase of 15% on 1H FY20.  Net revenue from authorised representative fees increased by $2.3m.

The Company reported a net profit after tax for the half of $1.6m, compared to a loss of $1.5m for the same period last year.

EBITDA increased by $1.8m from the same period last year to $2.1m (excluding legacy claims) due to advice fee growth, slower runoff of rebates, and continued focus on operational efficiencies.

Centrepoint Alliance continues to grow its position as a scalable service provider to licensed and self-licensed financial advisers and attract quality advisers, with 27 new advisers joining during 1H FY21.

The Company previously announced a resumption of dividend payments and will pay a fully franked special dividend of 3c per share and an interim ordinary dividend of 1c per share.

Mr Angus Benbow, Centrepoint Alliance CEO, said: “We are proud to deliver continued improvements in revenue and profitability in the first half of this financial year.

“The three-year strategic transformation that we commenced during 1H FY19 is progressing according to plan and has allowed us to improve the Company’s operating performance and positioned us to seek new strategic opportunities.”

Mr Alan Fisher, Centrepoint Alliance Chair, said: “Centrepoint Alliance continues to improve its operating performance, and competitive position as the Company navigates structural change in the wealth management industry. While the size of the advice industry as measured by authorised representatives is shrinking, large licensees such as Centrepoint Alliance are gaining share and leveraging the advantages of scale and technology leadership.”

Looking forward, Mr Benbow said Centrepoint Alliance was well-positioned to benefit from ongoing industry fragmentation.

“We enter 2021 placed strongly to drive continued growth and value for our investors and our community with a scalable business model, revenue certainty, an attractive service platform for advisers, and a simple and clean balance sheet.”

Mr Benbow highlighted Centrepoint Alliance’s advice technology strategy as a key driver of further business growth following the Company’s significant investments in Enzumo, data capabilities and partnerships over the past three years.

He noted Centrepoint Alliance’s recent agreement with UK-based Intelliflo will make it one of Australia’s first large-scale licensees to access Intelliflo’s open data architecture benefits.  Intelliflo has been working with Centrepoint Alliance-owned Enzumo, its Australian implementation partner, and several pilot Centrepoint Alliance practices over the last 18 months.

“We retain a clear focus on our objectives to enhance value in 2H FY21, as we drive aggressive organic growth in the licensed and self-licensed market, leverage our scale advantage with adviser technology investments and extensions, and actively pursue consolidation opportunities,” Mr Benbow said.

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Angus Benbow

Centrepoint Alliance, a leading provider of advice and business services to financial advice firms throughout Australia, has announced its first-mover agreement with Intelliflo, the UK’s market leader for financial advice technology.

Centrepoint Alliance’s adviser network will be one of the first in Australia to access Intelliflo technology, which is used by more than a third of the UK advice market.

Financial planning technology solutions provider, Enzumo, which was acquired by Centrepoint Alliance in June 2020, will work with Intelliflo to implement its offering across the Australian market.

Mr Angus Benbow, CEO of Centrepoint Alliance, said the agreement was the latest step in Centrepoint Alliance’s ongoing commitment to providing cutting edge technological solutions to both authorised representatives and self-licensed businesses.

“We have been receiving a high volume of enquiries from advisers seeking a new home, and technology is high on their list of priorities,” Mr Benbow said.

“In addition to teaming up with Intelliflo, Centrepoint Alliance has been making significant investments in technology including the acquisition of Enzumo, the introduction of an online adviser portal, Centrepoint Connect, and the development of the Centrepoint Practice Dashboard tool.”

A new era of advice tech

Mr Benbow said Centrepoint Alliance and Enzumo are working closely with Intelliflo to create the offering for the group.

“We believe Intelliflo’s technology will greatly benefit financial advisers, and we are delighted to be working with them so that the Centrepoint Alliance community will be one of the first to access the benefits of Intelliflo’s open architecture,” Mr Benbow said.

Mr Nick Eatock, CEO and Chairman of Intelliflo, said the partnership with Centrepoint Alliance and Enzumo had been invaluable in helping Intelliflo formulate its Australian market offering.

“Our engagement with Centrepoint Alliance has been building for some time,” said Mr Eatock. “We greatly value the opportunity to work together and believe this marks the beginning of a new era of advice tech for Australia.”

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Mr Smith brings significant experience in business development, channel strategies and adviser recruitment and retention.

Prior to joining Centrepoint Alliance, Mr Smith spent over four years as Business Growth Manager at MLC Wealth, where he was responsible for recruiting quality self-employed financial advisers into MLC licensees.

Commenting on the hire, Paul Cullen, Group Executive Advice for Centrepoint Alliance said: “We are delighted to welcome Charles to the Centrepoint Alliance team.

“We are receiving a lot of interest from advice firms who want to explore their licensing options, and Charles brings the deep knowledge and experience required to assist businesses in making the right choice for their needs. 

Mr Smith has been in the industry for several decades and has held many senior institutional positions as well as executive and non-executive roles for major licensees.

“Centrepoint Alliance continues to attract the attention of both licensed and self-licensed advisers and I am looking forward to contributing to the business’ continued growth,” Mr Smith said.

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Paul Cullen

Advice firms looking to change licensees need to consider the long-term viability of the group rather than reacting to short term incentives, according to Centrepoint Alliance.

Mr Paul Cullen, Group Executive Advice, Centrepoint Alliance, said the disruption that has occurred in the financial advice industry in recent years has seen increased interest in mid-tier dealer groups offering both licensing and self-licensing options. However, finding the right licensee to align with means advisers need to apply more scrutiny, including probing as to how licensees are adapting to the changing regulatory environment.

“Selecting a group to align with is potentially a life-changing choice, so advisers need to spend a lot of time researching the right partner,” said Mr Cullen. “However, some licensees are unreasonably expecting advisers to make choices in as little as eight weeks.

“With grandfathered commissions ceasing from 1 January 2021, advisers need to ensure licensees have the necessary scale and structure in place to manage the transition to new revenue models or they risk significant fee increases.

“Advisers are now more focused on what they get for their money and are looking to align with a provider that has both financial strength and longevity. Advice technology, approved product lists, business support and access to the right training opportunities are also critical areas of focus.

“This is not only being driven by the advisers but also by their clients, who have become increasingly savvy and want reassurance the licensee is reputable,” Mr Cullen said.

Choosing the right business model

In a new whitepaper, What’s Your Path?, Centrepoint Alliance provides a framework for deciding whether to join a licensee or to self-license.

“Choosing the right licensing option can be overwhelming, and it is difficult to remove emotions to make objective decisions,” Mr Cullen said.

“We have observed that many advisers who have been displaced by large institutions are often drawn to the autonomy offered by self-licensing. However, many are unprepared for the responsibilities that come with operating an AFSL.

“We hope this report will help business owners who are grappling with which direction to take to weigh all the available options.”

Adviser movements to continue

Looking forward, Mr Cullen said recent developments in the financial advice industry, including the sale of MLC’s Wealth division to IOOF and AMP’s comprehensive review of its business, were likely to lead to more adviser movements in the current financial year.

“We are seeing a second wave of movements as advice firms either review their initial decision or take the first steps towards finding a new licensee to call home,” Mr Cullen said.

“Centrepoint Alliance has been receiving more than double the usual number of inbound enquiries as a result of recent industry announcements.”

In FY20 Centrepoint Alliance saw a 6% increase in its adviser numbers, against a market that contracted by 13%.

“Centrepoint Alliance was one of the first to introduce a clear fee-based pricing model, and these numbers show our model is resonating with advisers,” said Mr Cullen.

“Advisers with high quality, sustainable businesses are increasingly seeing Centrepoint Alliance as their partner of choice.

“We are investing in our service framework and our focus is to continuously improve our offer so we can provide even greater value for our licensed and self-licensed advisers.”

Read the whitepaper.

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