As vertically-integrated changes dominate the world of dealer groups, the non-aligned sector is at the beginning stage of a fundamental transformation of mergers and acquisitions, according to FMD Financial's chairman.
The privately-owned Melbourne practice would merge with Reynolds Williams and Associates in order to deliver the scale and structure required to support its growth ambitions, Greg Fagan said.
"The independent boutique space is a pretty lonely place at the moment, there's not many of us left out there and we're making the statement [that] boutique practices need to get significantly bigger to continue to be a player," Fagan said.
He said independence was about ownership and a big part of the marketplace would want a non-aligned offering in the future.
"There's been a lot of businesses [that have] been swallowed up in the last six months, so the landscape is shrinking for the large, middle-ground boutique independent space. To be really effective as an independent, you need a reasonable amount of size," he said.
Consolidation in the non-aligned space was a sign of things to come, he said.
"There are a lot of two or three-man practices out there all doing a pretty good job, but I think where the industry is going, those groups need to band together," he said.
Fellow privately-owned practice Alps Network yesterday announced it had joined with Australian Financial Services Group (AFS) as the dealer group reflected its professional values of independence and supported its fee-for-advice model.
Brisbane-based Alps Network principal Peter Larkin said AFS's adviser-focused structure, framework, programs and initiatives would provide it with the foundation to achieve its long-term business growth objectives.
The organisation's 'adviser-owned, adviser-driven' slogan and independence were additional factors that influenced the decision, AFS said. The addition would strengthen its presence in Queensland, it said.
Furthermore, aligned boutique advisory firms continue to reposition themselves for the future.
MQ Financial Services, which operates under the Magnitude dealer within the BT Financial Group, has created a chief executive role, appointing Steve Watts to the position.
The decision will achieve a 'corporate overlay' as MQ recognised a collective structure was fundamental for the business to achieve its growth plans of increasing its revenue by more than 300 per cent.
