Insignia spruiks advice restructure

During the 2023 financial year, Insignia took steps to restructure its advice offering, leading to the announcement of a new partnership model at the end of July.

The new partnership model comprises self-employed licensees comprising RI Advice Group, Consultum Financial Advisers, and TenFifty.

Insignia Financial chief executive Renato Mota said: “This is a transformational initiative for our advice offering and will accelerate the return to profitability of our advice business, while ensuring our advice services model is positioned for sustainable growth.”

According to Wealth Data figures, Insignia suffered the largest adviser losses of any licensee in the 2023 calendar year, dropping by 92 advisers as of 3 August.

Insignia reported a total of 1,413 advisers across its network, which comprised 461 practices. There was a total of $204.6 million in net revenue, offset by $240.5 million in expenses for an EBITDA loss of $35.9 million in FY23.

However, Insignia said that the integration of MLC Advice into Bridges has stabilised its professional services channel, with a short-term reduction in revenue as the “advice service proposition is reshaped and low fee-paying clients were moved off fixed term service agreements”.

The firm added that the closure of its Lonsdale licence is nearing completion, while it is “in discussions with interested parties” about the potential sale of the Millennium3 (M3) licence. Insignia’s Godfrey Pembroke licence will also be returned to Godfrey Pembroke advisers.

“The past financial year saw us reach important milestones in the integration of MLC, the transformation of our business and the creation of Insignia Financial, providing the foundation for unlocking future growth,” Mr Mota said.

“FY23 was a year of achievement. A year of delivering on our promises – evidenced by our net funds flow outcomes, simplification, product improvements, and exemplified by a number of awards and client outcomes.

“We are two years into our journey to creating Australia’s leading financial wellbeing organisation, and it is our achievements to date including the accelerated delivery of benefits that created the opportunity for us to refresh our strategy to drive focus and position us to deliver on our ambition.

“While the result was impacted by lower average FUMA following investment market falls in 4Q22 as well as strategic repricing decisions, our reduction in operating expenses highlights the benefits of deliberate strategic decisions, and the achievement of our net positive inflow target demonstrates the strength of our go-forward proposition.”

Insignia also said it in the process of creating a new client wellbeing division, which it said would enable “greater focus on pursuing opportunities to provide financial help, guidance and advice through all stages of life, and improve client engagement”.

The new division will bring together its professional services advice teams, Bridges and Shadforth, and be led through a newly created role of chief client officer.

“We have made significant progress, delivering on what we set out to do. As a result of all we have achieved, we are looking ahead with greater confidence and clarity. Now is the time to refresh our strategy and continue to make significant progress across the business,” said Mr Mota.

In terms of its financial results, Insignia said that its net profit after tax (NPAT) grew 39 per cent in FY23, totalling $51 million, while its underlying NPAT fell 15 per cent to $191 million.

Overall platform flows were only slightly higher than FY22, largely on the back of a strong year for Insignia’s Workplace Super offering. Net flows into Workplace were at $2 billion for FY23, significantly higher than the $1.2 billion in the prior year.

Expand Extra, Expand Essential and the Shadforth Portfolio Services (SPS), hosted on the Evolve platform, attracted a further $1.9 billion of net inflows over the year.

Insignia also announced that it had selected FIS Global’s Compass as the go-forward Master Trust registry platform for its superannuation and pension products.

“Our FY23 results demonstrate our continued progress and achievements across our three businesses. We are well positioned for opportunities ahead and have built a business that is adaptable, with a sharpened focus, and will allow us to leverage our size and scale to support more Australians,” Mr Mota said.