Financial Planning

Planner cooperative mooted

financial planning cooperative

The establishment of a financial planning cooperative to help smaller firms with running costs has been proposed by a Qld-based practice.

A Queensland-based financial advice practice is currently seeking expressions of interest regarding the potential formation of a cooperative structure aimed at assisting smaller financial planning firms manage their running costs more efficiently.

“We’re actually researching a co-op agreement at the moment where maybe half a dozen or so like-minded advisers can come together to share costs and back-office [functionality] so they’re not having to absorb [any increased costs they’re facing alone],” Wealth Planning Partners director Amanda Cassar revealed at the recent LightYear Docs 2021 Virtual Strategy Summit.

“I’m going to [experience] a tripling of my fees next year to stay licensed with my current licensee and obviously there are businesses that won’t be able to absorb [something like] that and I don’t want to absorb it.”

The model being proposed is where a larger organisation would provide back-office, administrative, paraplanning and marketing services to a collective of smaller advice firms at a lower cost compared to having each individual practice house their own functions of this nature.

Cassar described it as akin to a dealer group structure, but without having the licensing facility included, and pointed out it would give the smaller practitioners more flexibility and control.

“If we’re individually licensed, then we can pick and choose the services we want from a dealer group,” she noted.

According to Cassar, the initiative is something needing to be explored given the uncertainty facing the traditional structures of the financial planning sector.

“The massive changes we’ve got, that aren’t really related to COVID but just post-royal commission industry changes, mean we need to be thinking very carefully about whether licences are going to remain in place going forward,” she said.

“The FPA (Financial Planning Association) has already come out and said it might look at individual licensing of planners.”

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital