Diverger sharpens focus on advisers

Diverger wants to tap into what it sees as a growing advice and accounting market which, based on its estimate, currently numbers 16,000 firms with a combined revenue of $20 billion.

In an ASX listing filed after its general meeting last week, Diverger said its growth strategy is focused on leveraging the demand for advice, which is far outstripping supply.

Specifically in financial advice, Diverger wants to extend membership and training to advice firms, pursue accelerator acquisitions that extend its scale and capabilities, and invest in advice practices, alongside exploring other service expansion opportunities.

Speaking at the general meeting, the chairman of Diverger, Peter Brook, said the ongoing challenging economic conditions and post-COVID-19 recovery, including rising interest rates and cost-of-living pressures, have driven home the relevance of financial advice and the role it must play in maximising Australians’ wealth.

“Overlay this with the demographic change sweeping through Australia such as the inevitable retirement of Baby-Boomers, the transfer of wealth and the growing numbers of Millennials (aged 26 to 41 years and who incidentally are advice seekers), emphasises the growing need for supported and quality financial advice in Australia,” Mr Brook said.

Noting the ongoing transformation of the Australian financial services industry, Mr Brook emphasised the challenges advisers face as they continue to adapt to both ongoing regulatory and educational requirements, as well as the pressure to establish and access the infrastructure required to compete in the market and provide advice to Australian.

“But while the demand for advice has increased, adviser numbers have decreased, putting even more pressure on the industry to look to scale to support advice. Smaller practices are looking for scale, efficiency, and equity solutions to grow their practices.

“Licensees, advisers and accountants are seeking the support of a service platform such as Diverger, which can fill the gaps in their infrastructure, necessary to compete and facilitate cost-effective advice. This is particularly so following the exit of the larger institutions such as banks from wealth management, and the focus that conflicted service and remuneration has rightly attracted. Diverger’s mission is to create an environment that supports advisers’ value propositions and accordingly their clients,” Mr Brook said.

“Our strategy is well articulated. We will continue to invest in our proposition, innovate, consider organic and M&A growth opportunities, and seek to deliver service excellence and value to our clients,” the chairman added.

Looking to the future, Diverger expects the advice industry to go through a period of reduced regulatory change but expects the industry to keep condensing amid a tight labour market.