Forte warns culture is key to perfect match


By Elizabeth Somerville

Email Article Print Article

Advisers seeking to move dealer groups or considering mergers and acquisitions need to think about cultural compatibility among other key issues associated with such moves, which are on the rise, according to one financial planning broker specialist.

“People are going to be moving and it will probably be at unprecedented levels,” Forte Asset Solutions managing director Steve Prendeville told financialobserver, referencing research from both CoreData and Investment Trends.

CoreData reported in September that one in six advisers was considering switching to a new licensee in the next 12 months, up from one in 10 in 2010.

The research found one in five wanted to move in the next five years, whereas nearly one-third said they wanted to acquire their own licence in that time period, Prendeville said.

The increase in advisers looking to change dealer groups was also backed by Investment Trends, which found a four percentage point rise in planners intending to switch dealers over the next 12 months, with 10 per cent looking for a new home compared to only 6 per cent in 2013.

“Any move is going to create significant business disruption and once it has been done, most vow never to do it again,” Prendeville told financialobserver.

“Therefore you need to make a measured decision – every business has unique needs and therefore one shoe does not fit all.”

He identified cultural fit as a key component to assess ahead of advisers changing dealer groups or before dealer groups entered into mergers or acquisitions.

“The real key is culture – you want to be surrounded by like-minded peers, you want best practice around you and the sharing of ideas and experiences - you want to see it from dealer management, but importantly you want to see it in other principals," he said.

“You want to make sure that you’re in a group that is culturally aligned [with you].”

Dealer group ownership, professional indemnity, the platforms on offer, as well as the research providers used and the cost of that research were other crucial factors, he said.

“In assessing the appropriate [dealer group], firstly know what you want your business to look like in five years and what assistance you need to get there,” he said.

“Then assess the dealer’s ability to get you there.”

« Back to Articles