The frictionless movement of assets is becoming a common feature of markets around the developed world, yet Australia remains a step behind. The ASX is in no mood to rush the move to T+1, however, after its calamitous attempt to implement distributed ledger technology.
It’s a dire situation for consumers but a massive tailwind for financial advisers. More people and more capital in the superannuation coffers than ever, with a stubbornly small number of advisers to service them.Â
Insignia’s ANZ and MLC moves show dividends
Despite an underwhelming $55 million loss across its advice business Insignia Financial has reported a largely positive full-year annual result call, largely attributed to the synergies and scale afforded by onboarding of the ANZ and MLC licensee businesses.
After a tough 3 year-integration period, Insignia reported its former ANZ licensees had reached “break even” and are set to make a profit in future earnings.
Meanwhile, the MLC business Insignia purchased early last year which brought about 400 advisers into the fold and increased its funds under management to $500 million is starting to pay dividends.
The group formerly known as IOOF reported a 59 per cent lift in underlying profit to $234.5 million for the financial year ending June 30 and doled out an 11.8c dividend, which brings the full year dividend up 2.6 per cent on the previous year.
“The reshaping of advice has had a meaningful impact on earnings,” CEO Renato Mota (pictured) said on a results call today.
“We delivered strong financial outcomes from the disciplined execution of our strategic priorities, and particularly from realising the benefits of the MLC acquisition.”
In a stark turnaround, net profit after tax went from a $142 million loss last year to a $36.8 million profit in FY22.
Key to the turnaround in the advice division has been 20 mergers and acquisitions aimed at strengthening and streamlining the business units. Insignia now licenses 1,600 advisers across the country in 531 firms, and has supplanted AMP as the largest advice provider in the country.
The group’s streamlined investment platform division played a large part in offsetting losses in other areas of the business; flows increased by $3.1 billion to $198.2 billion. Funds management was another strong performer for Insignia, with underlying profit rising 36 per cent to $73.6 million on the back of $92.3 billion of funds under management.
The results go a long way to validating Insignia’s ‘Wealth 2.0’ project, based on the notion of streamlining and strengthening the business in the wake of the ANZ and MLC wealth purchases.
“Our results demonstrate we are pursuing the right strategy and implementing it with with focused and accelerated execution,” Mota said in a statement. “Across all three businesses, we are realising our competitive advantage by leveraging scale and expertise, and delivering growth through simplification.
“Our transformation process has fundamentally changed our business, and we have built strong foundations to take advantage of the opportunities we see ahead.”
