Australia’s largest non-institutionally owned financial advice group has increased its adviser numbers by more than 10% in just over a month.
Don Trapnell, the director of risk-focused licensee Synchron, puts the licensee’s success down to a number of factors, including changes to grandfathering provisions and its life insurance and commission structures.
He told Wealth Professional
that between March and April this year he has received 34 applications from individual advisers wanting to move to Synchron, and there are more applications pending.
“We’ve had an incredible upsurge and it’s down to a couple of things,” Trapnell said. “One is the grandfathering issue – ASIC has now said that because the new government has made it clear that [grandfathering provisions] are one of the cornerstones of policy, it will take a ‘no action’ position.”
Before this clarity, Synchron couldn’t “in all consciousness” encourage advisers to move to the licensee if there was a possibility they could lose an entire revenue stream.
Another attraction is the group’s open list of life insurers due to its non-institutionally owned status, Trapnell said, adding that fewer and fewer advisers are in favour of a vertical integration model which sees financial incentives or penalties being handed out for the support of certain products.
“Advisers want to make the decision based on what the interest is of the client,” he said. “There are no bad life insurance companies in Australia because they’re all governed by the Life Insurance Act and they all have their prudential requirements. Why should the general public not have access to every company?”
Synchron is also the only licensee in Australia to pay its advisers commissions on a daily basis, which has been another important incentive for the surge in those applying to join the group.
Trapnell, who along with the second director John Prossor is a practising adviser, said the commission structure is a no brainer: “You’ve done the job and it’s your money. The licensee gets paid a fee for doing its job, so it shouldn’t be hanging onto that money.”
Currently Synchron has 313 representatives, and Trapnell predicts that this will lift to 330 by the end of the year.
The recent surge in numbers has meant the licensee has added to its administration and compliance team, with Dave Allan and Neil MacKay assisting directors and mentoring advisers.
Simone Ciancio has also been recruited to help out.
The team have also outgrown their West Melbourne office and are preparing to move to a space 50% bigger in June.