Infocus Money Management has been forced to let go of a number of its financial planners and practices, because they were unwilling to adapt to its new professional fee business model.
The dealer group had no choice but to part ways with eight practices that consisted of 14 financial planners since the professional fee model was implemented on 1 July 2010, Infocus managing director Darren Steinhardt said.
However, Steinhardt said Infocus added 12 offices with 20 advisers over the period.
The firm currently has 75 practices and 147 advisers.
“One of the decisions that we had made, which was implemented on 1 July last year, was to transition to the professional fee model a full two years prior to the timeline announced in the proposed FOFA (Future of Financial Advice) reform agenda,” Steinhardt said.
“A professional fee standard is a remuneration system that combines all of the various components of hourly rates, value rates, risk premium and job rates.
“There were some businesses that were really, really struggling with that.”
He said most Infocus practices were performing either exceptionally well or were well on the way to achieving what was required, but there were some practices in denial and did not believe they needed to change even with the FoFA reforms coming in 2012.
“There were also some who had the wrong reality – we felt their views on what the industry would look like post 2012 and the path they wanted to head down were incorrect and hence we parted ways as well,” he said.
“I don’t believe it’s a choice of going down the fee path or not; the choice is going down the fee path or getting out of the business.”
He said the culling process was complete and Infocus’s priority in 2011 was to expand and ensure all practices had implemented the professional fee model.
