The InvestorDaily Dealer Group Sentiment Report – compiled off the back of 744 survey responses – found that 26 per cent of respondents intend to review their dealer group or licensing arrangements within the next 12 months, with a further 9 per cent “unsure”.
Of those planning to make a switch, 36 per cent indicated it would be a “year from now” – the survey was conducted in late 2014 – with more than 20 per cent indicating in six months’ time, and 7 per cent suggesting “in the next month”.
Meanwhile, 46.4 per cent of prospective switchers indicated they are likely to choose an “institutionally-owned/aligned” group, while 53.6 per cent indicated they were likely to choose a “non-aligned/independently-owned” licensee.
Combined with the finding that 44.8 per cent of advisers licensed by their current dealer group for less than one year are with “independent” or “independently-owned” groups, these findings may indicate a surge in numbers in the non-aligned sector, given some sources put this figure at as low as 20 per cent of the market currently.
Dealer groups themselves may be partly responsible for the number of advisers looking to make a switch, given that 49 per cent of all respondents have been approached for the purposes of recruitment by a dealer group in the past 12 months, with licensee BDMs the most likely professionals to make the approach, followed by licensee executives and CEOs.
Asked to rank a number of factors that might make them switch licensees in order of importance, respondents indicated that “low licensing fees/costs”, “reputation/compliance record" and “good culture/environment” were the most important factors, followed by “approved product list/model portfolio options” and “compliance/legal support”.
While the chief factor causing financial planners to stay put is – understandably – that they are “happy with current arrangements” (62 per cent), 38 per cent indicated that “business resources/transition costs” might be a mitigating factor, followed by “trail commissions/grandfathering”.
Given that the federal government and opposition recently reached an agreement on the issue of grandfathering – announced subsequent to the survey closing – this may be a lesser factor in the current climate.
Overall dealer group satisfaction sits as 28.9 per cent, with 40.6 per cent very satsifed, 18.7 per cent dissatisfied and 11.7 per cent neutral.
For a copy of the full report, including which licensees are likely to be winners and losers of market movements please visit: http://store.sterlingpublishing.com.au/investor-daily-dealer-group-sentiment-report-p-346.html
