Insignia confirms another drop in adviser numbers

The number of advisers in the Insignia Financial network fell to 1,385 at the end of the September quarter, down from 1,413 three months earlier.

According to a quarterly business update released by Insignia on Thursday, this reduction of 28 advisers was primarily within the professional services channel due to a “right-sizing” of adviser numbers within its subsidiary Bridges.

Meanwhile, the fall seen in the adviser services channel was mostly attributed to the discontinuation of the Lonsdale licence, with seven practices representing 19 authorised representatives joining Consultum from Lonsdale.

Of the 1,385 advisers in the Insignia network as at 30 September, 219 were in the professional services channel and 1,166 were in the advice services channels.

Insignia’s Evolve platform attracted net inflows during the quarter. However, this was offset by outflows, mostly from MLC Wrap ahead of the planned migration to Expand (Evolve23), which reportedly remains on track for delivery in the second half of the financial year.

The firm noted that flows for MLC Wrap are expected to “continue to be challenged” moving forward until the migration to Expand is completed.

Overall, Insignia reported total net outflows of $1.4 billion for the quarter. The firm’s funds under management and administration fell by 0.6 per cent or $1.9 billion to $293.1 billion.

Funds under administration (FUA) decreased by 1.7 per cent or $3.5 billion to $205.5 billion. The quarterly fall included negative market movement of $1.3 billion, net outflows of $1.3 billion and pension payments of $925 million.

Meanwhile, funds under management (FUM) increased by 2.0 per cent or $1.7 billion to $87.6 billion. Positive market movement of $1.8 billion was partly offset by net outflows of $115 million during the quarter.

The firm indicated that it is making strong progress on strategic initiatives to strengthen and simplify its business, reduce costs, and improve growth momentum.

“We are delivering strongly against our FY24–26 strategic initiatives announced in July and are on track to meet our FY24 gross in-year target of $60 to $70 million and our total FY24–26 gross annualised benefit target of $175 to $190 million,” commented Insignia Financial chief executive officer Renato Mota.

Among Insignia’s strategic initiative is the MLC Wrap migration involving nearly $40 billion of funds under administration across approximately 100,000 member accounts, the creation of a new advice services partnership model, and a cost optimisation program.

“FY24 is a year of transition, with the strategic initiatives being undertaken expected to result in a meaningful and sustainable improvement in earnings growth during this three-year strategy,” said Mr Mota.

“Over FY24–26, our investment in technology will enhance our position for the future, enable simplification and efficiency benefits, and deliver superior client outcomes.”

Insignia also highlighted the upcoming departure of Mr Mota in its update. The firm announced last week that Mr Mota will step down as CEO at the end of February 2024.

“We have developed a clear vision for Insignia Financial and remain focused on delivering FY24 outcomes and executing our strategic organisational priorities. Our focus, growth prospects, and purpose remain unchanged, and I am confident we can deliver our plan based on our track record of execution,” said Insignia Financial chairman Allan Griffiths.

“Looking forward, delivery of our strategic priorities will result in a sustainable, cashflow generating business, with a strong balance sheet, and foundation for growth, leveraging the scale from our position as one of Australia’s leading wealth managers.”

The firm has begun searching for a new CEO to replace Mr Mota and “lead the next phase of Insignia Financial’s growth”, Mr Griffiths added.

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.