Insignia experiences another reduction in adviser numbers

The number of financial advisers in the Insignia Financial network has fallen again, with the firm disclosing a reduction of 45 advisers over the December quarter to a total of 1,525.

This included a reduction of 37 advisers in the self-licensed channel, which Insignia indicated was primarily from within existing member practices following reviews of their adviser bases during the quarter. This reduction is not anticipated to have a meaningful financial impact.

Across the employed and self-employed channels, Insignia noted that the level of departures moderated further and was consistent with slowing reductions across the industry in the quarter.

Insignia, which had 1,765 advisers in its network at the end of 2021, last year saw adviser numbers fall by 83 in the first quarter, 82 in the second quarter and 30 in the third quarter.

In its quarterly business update released on Wednesday, Insignia reported $201.3 billion in funds under administration (FUA) as of 31 December 2022.

Positive market movement of $7.6 billion in the December quarter was offset by Australian Executor Trustees’ FUA of $6.9 billion being divested, pension payments of $706 million and net outflows of $267 million, with an overall reduction of $0.2 billion or 0.1 per cent.

Excluding the aforementioned divestment of Australian Executor Trustees, which was completed in November last year, Insignia’s FUA lifted by $6.7 billion or 3.4 per cent.

Meanwhile, funds under management (FUM) fell $6.9 billion or 7.6 per cent to $83.8 billion, with positive market movement of $775 million and retail net inflows of $160 million offset by the divestment of JANA’s $7.6 billion in FUM along with institutional outflows of $191 million.

Insignia stated that it had entered into a binding share sale agreement to divest its remaining 45 per cent stake in JANA, which will now become wholly management-owned.

Excluding the sale of JANA and the transition of responsible entity for JANA’s implemented consulting clients from MLC Investments to an alternative provider, Insignia saw a $0.7 billion or 0.9 per cent increase in its FUM.

“Insignia Financial continues to see improvement in platform flows, with net flows in the first half $0.8 billion higher than the same period last year,” commented Insignia CEO Renato Mota.

“Pleasingly, this improvement is most observable across the acquired MLC and P&I platforms, which were historically seeing significant outflow. Platform inflows were $4.7 billion during the quarter, including $2.7 billion in the advised channel, highlighting the attractiveness and competitiveness of our contemporary, go-forward offerings.”

The firm also noted that the integration of MLC Advice into Bridges, and the subsequent reshaping of the service proposition, is expected to result in a short-term revenue reduction as low fee-paying clients are moved off fixed-term service agreements.

Insignia is due to release its 1H23 results on 23 February.

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.