Wealth expansion boosts YBR profit

31-Aug-2017

By Daniel Paperny

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Yellow Brick Road (YBR) has delivered its first profit, with its results for the 2017 financial year revealing the company had secured a pre-tax profit of $2 million in an increasingly challenging environment for wealth managers.

The results were due to a persistent focus on expanding distribution, diversifying its revenue streams and exploring new channel opportunities, the company said in a statement. 

An increasing focus on channel expansion saw YBR significantly extend its wealth services offer over the financial year, attracting a growing number of advisers who sought the support of a network but wanted to deliver advice “with more freedom”, the company said.

The results revealed a 26 per cent increase in the company’s revenue from funds under management (FUM), with revenue from insurance premiums rising by 21 per cent.

In addition, underlying FUM increased by 61.8 per cent to $1.14 billion. 

The rollout of new education and wealth services, such as phone-based advice and wills, increased the participation of YBR franchises in the group’s wealth services from 55 per cent to 80 per cent, with a growing number of franchise advisers, mobile advisers and new wealth hubs being introduced, YBR executive chairman Mark Bouris said.

Speaking to financialobserver, Bouris said a key focus moving forward would be to continue to grow the penetration of the company’s wealth business within its predominantly mortgage-focused franchises so that more consumers could have all their financial needs met in the one branch.

He said the company was also currently looking at expanding its Australian financial services licence to more financial planning businesses.

“To help further drive our wealth management growth, we will be improving our current products and platforms, including Yellow Brick Road Super, developing a new product range across Smarter Money Investments, and moving into new and adjacent markets,” he said.

“Branch recruitment will also continue to grow the network with a strong focus on finding wealth advisers.”

He added the company would build an innovative learning and development platform for advisers and mortgage brokers aimed at nurturing business skills, technical knowledge and lifting professional standards across the industry.

“We’ve been focusing for some time on a major initiative that will create a new model for learning; we have a suite of great content, but are now working on delivering that at scale in the most engaging format,” he said.

“The focus is on coaching advisers and brokers to run effective businesses, not simply do the minimum to keep up with CPD (continuing professional development).

“It’s not just about compliance, but [about] boosting efficiency and giving consumers the best outcomes.”

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