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.

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[1] Roy Morgan employment data series, February 2021

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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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In announcing the appointment, Centrepoint’s Advice Solutions Executive, Paul Cullen, stressed the importance of having a high quality, well-resourced research team.

He emphasised that the appointment of Ms Herold contributes to the group’s strategy of attracting and retaining the best advisers in the industry.

Mr Cullen stated, “Miriam’s appointment demonstrates our commitment to investing in people, capabilities and technology so that our advisers are better able to deliver great outcomes for their clients.”

Ms Herold was most recently Head of Managed Fund Research for IOOF Holdings and has over 18 years’ experience in Research, Portfolio Management and Investment Analysis.

When asked what attracted her to Centrepoint, Ms Herold said it was the organisation’s unique position in the market. “As an ASX listed business that is not owned by a bank or insurance company and being a partner of choice for over 500 advice businesses, Centrepoint is uniquely placed to respond to the changes that are taking place in the advice industry.

“I look forward to working with the research team and the broader Centrepoint community to continue bringing market leading solutions to our advisers.”

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