Insignia continues to bleed advisers, confirms new model poised to start by mid-year

In its quarterly update for the three months ended 31 December, Insignia reported adviser outflows of 186, reducing its overall count from 1,385 to 1,199.

As of the end of 2023, Insignia boasts 211 professional services (employed) advisers, 533 self-employed (licensed) advisers, and 455 self-licensed advisers in its network. The most significant adviser outflows occurred under the self-employed (licensed) model where Insignia lost 151 advisers.

The financial services firm explained the losses as a result of the Millennium3 business sale to WT Financial which was finalised in December.

Commenting on the sale in November, Insignia Financial’s chief executive officer, Renato Mota, said: “The sale of M3 marks another important milestone as we execute our strategy, creating a simpler, more sustainable advice offering, enabling greater growth focus for the future.”

At the time, Mr Moto said the firm’s advice strategy will enable it to focus on the growth of their professional services advice businesses, Shadforth Financial Group, and Bridges Financial Services, expanding the scope of advice through superannuation, and to leverage future opportunities presented by the government’s response to the Quality of Advice Review.

Insignia also last year announced the “resetting” of its advice operating model, which on Thursday it acknowledged is “progressing” with the Rhombus Advisory entity (formerly known as Advice Service Co) established.

Insignia first announced this new model back in July, and at the time said that it represents the ambition to create Australia’s largest adviser-owned licensee group, positioning it to capitalise on the dynamic self-employed advice market with the support of Insignia Financial.

The model, the firm explained at the time, will work as a new partnership ownership model for its self-employed licensees, which comprises RI Advice Group (RI), Consultum Financial Advisers (Consultum), and TenFifty.

On Thursday, Insignia said: “Advisers have continued to demonstrate positive sentiment towards the partnership strategy and participated in a roadshow during 2Q24.

“The equity participation approach was presented to advisers and focus is now shifting towards implementation by July 2024.”

Regarding its three-month results, Insignia said its funds under management and administration (FUMA) increased by $7.5 billion to $300.6 billion as at 31 December.

The firm confirmed outflows of $511 million, largely reflecting institutional asset management outflows and strategic execution of platform strategy.

Mr Mota, said: “We have made a strong start to the financial year and solid progress on the FY24–26 strategic initiatives announced in July 2023.

“We continue to see strong momentum in flows into our flagship and workplace platforms. However, we have experienced outflows from MLC Wrap ahead of transition to the contemporary Evolve platform in April.

“We have further strengthened our proposition to clients and members through the establishment of the Client Wellbeing division and appointment of a chief client officer. This division is focused on improved retention and new client acquisition.”

Looking ahead, Insignia advised that the planned migration of MLC Wrap to Evolve is on target to be completed by early April 2024.