Advisers drifting towards big organisations
The head of one dealer group says that it is losing advisers to big organisations, and AMP managing director Jack Regan says that is an inevitable outcome of regulation.
Friday, March 14th 2014, 11:40AM 
5 Comments
by Susan Edmunds
Nicola Smee, of the Ginger Group, said it had become noticeable that big firms were increasingly keen to sign up advisers as tied agents.
“They’re picking good brokers off one by one to be tied agents and offering them extra bonuses they’d normally pay [groups],” she said.
Smee said that was hard on groups that had invested time and money in helping those advice businesses to grow.
But AMP managing director Jack Regan said it was a natural progression for financial advisers to seek out the support of larger organisations. He said 80% of AMP's 604 advisers were part of the QAN. both QFE and non-QFE members. THe rest had significant distributor arrangements and operated with their own compliance and support services.
Regan said there had been fewer new advisers entering the industry since the barrier to entry became higher. But those already in the industry were seeking the backing of bigger organisations to help them meet their compliance requirements.
The number of people coming to AMP from other groups was more of a drift than a run, he said.
But he expected it to get a boost when the Financial Markets Conduct Act, with its attendant rules for DIMS providers, took hold.
Advisers would need the backing of organisations that had the scale to offer adequate resources, Regan said.
“It’s inevitable that people are going to require more and more support services to meet the requirements that go with regulation.”
Those wanting to provide DIMS would need significant levels of organisational capacity and systems to help them comply with regulation.
They would need the right sort of software, templates and scalable and efficient platforms as well as substantial independent research capability, Regan said.
That was provided through AMP’s QAN, he said. “It’s inevitable that people will shift to that model. Advisers are starting to realise there’s more to the compliance environment than they realised.”
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Comments from our readers
Let's be clear about this, AMP do offer good support in a regulatory environment. It is true that often those who are part of their QFE feel the mothership may be over protective but the fact is that a lot of the worry and risk is taken away or shared.
@Brent - If you work for a big company then your comment has credibility. The reality is that only a small number of AMP advisers work for AMP, the vast majority (and that is pretty vast indeed) are self employed businesses and contractors who have reasonable control over their product set and subsequently their clients best interests.
Happy to debate the above with anyone over a beer but not on here - let's stick to the thread
In the past didn't AMP send all its advisers out and get them to set up their own businesses, only now to decide recently that the corporate wants to return to having in-house salaried advisers? It must annoy the very long serving loyal advisers of AMP that the parent company now wants to compete against them using its corporate might and balance sheet.
While AMP is busy welcoming the drift of new advisers in, they better check that some of their bigger more successful adviser relationships aren't trying to jump off the bus.
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