Perth-based dealer group Plan B Group (Plan B) is in the process of adding numbers to its planning network however has stressed it will not use sign on fees as a way to entice advisers.
“We are looking at attracting advisers into the group but we are not paying sign on fees,” Plan B chief executive Andrew Black told InvestorDaily.
“The biggest thing that’s happening in the industry is advisers receiving these sign on fees. It’s a highly distorting factor and it seems to be contrary to all of the governance and regulations put into place for clients’ best interests.”
Plan B refuses to “play in that game”, Black said.
His comments come after the group announced in a company statement to the Australian Securities Exchange last Thursday that it is anticipating a drop in its net profit after tax (NPAT).
Its NPAT for the financial year ending 30 June 2012 is expected to be a decrease of between 28 and 30 per cent over the reported NPAT for the prior financial year.
As a result, Plan B is looking to implement growth and cost cutting initiatives.
The group is close to announcing its latest adviser additions, with two or three close to signing up and a further five to six that are still in the initial stages.
“We’ve been very adamant that we want to attract quality advisers into the Plan B wealth area who want to be there for the uniqueness of being in a boutique firm and the independence factor attached to it,” Black said.
“There’s been a tremendous amount of activity in the entire wealth management space where there seems to be ludicrous amounts of money paid to people in the form of sign on fees.
“That can only be reflected in clients being moved to new lots of advice that I seriously doubt won’t always be to the benefit of the client.”
Further growth initiatives include expanding its executive advisory service and adding its investments into the My Adviser platform, after acquiring another 60 per cent of the company at the start of the year, taking its total ownership to 93 per cent.
Details of the cost cutting initiatives have not yet been decided by the board, but it hopes to reach a position on those strategies by the end of July or early August.
“They quite often have upfront costs attached to them and a longer lead time for the return and therefore as you’d expect, the board are looking for a great deal of granularity and trying to get surety that we can actually deliver the objectives around those,” Black said.
“As soon as we’ve got that completed and the board are happy with that strategy, we’ll communicate that to the market at that point in time.”
