Business ties between Count Financial and BT Financial Group (BTFG) are believed to have become strained following BTFG's poaching of a number of Count firms.
InvestorDaily understands that as a result of BTFG luring five Count practices to its business, the Commonwealth Bank of Australia-owned dealer group called for the withdrawal of BTFG as a key sponsor of its annual conference this week.
It is unknown how long BTFG has been a sponsor of Count conferences or the amount invested, however, the parties' business relationship is understood to extend to a number of decades due to Count's use of BTFG's investment platform, BT Wrap.
Neither party would comment on whether there was any truth to the sponsorship claims.
"Count doesn't discuss who it invites to its annual conference. Count is looking forward to addressing advisers at its annual conference this week and sharing its blueprint for the future," a Count spokesperson told InvestorDaily.
Earlier this week, BTFG announced it had recruited five practices from Count.
The recruitment of the practices would not have a material impact on the dealer group, the spokesperson said.
"Count remains well placed, with a very diverse business of approximately 300 practices," the spokesperson said.
According to the IFA Dealer Group Survey 2011, Count had 658 advisers, 342 practices and $9.86 billion in funds under advice (FUA) in the 12 months to 30 June 2011.
Count listed the BT Wrap as its preferred platform ahead of Colonial First State's FirstChoice, Perpetual's Wealth Focus platform and IOOF's Pursuit platform.
In regard to whether BTFG's decision to recruit Count practices would have an effect on the BT wrap and Count relationship, a BTFG spokesperson said: "Our focus remains on delivering a market-leading product to our advisers.
"In this type of market our number one priority is earning market share from our competitors and we will do this by continuing to have the best products and best service.
"We believe our platform offers numerous advantages to our practices and we hope to retain this valued business."
Paragem Holdings managing director Ian Knox said the decision behind BTFG's recruitment of Count practices could stem from the Westpac-owned group fearing the strategy of badging was under threat.
"When a dealership is sold to a wrap competitor - typically it's only banks and the AMP that buy whole dealerships - so it's inevitable there's going to be client churn to the buyer's wrap," Knox said.
"[BTFG's] response would be to cut a deal with a practice wherein the practice gets a higher VB (volume rebate) than they would have received after the previous dealer took their slice.
"What this means is that BTFG would keep the FUA, get higher margin - as they are not paying the white-label rate - and the practice would receive more because the dealer isn't getting its cut. No doubt that's the game plan for the key users of DKN's BT wrap as well."
He said the disappointing element of such strategies changing was that the industry debate again "moves from advice to product".
