Adviser case study | Transitioning to a new licensee

Case Study

Interview with Susan Paterson, Director, BIG Group

One of the critical barriers to moving licensees is the perceived disruption to your business which can be painful for both the adviser and the client.

Can you tell us about your business, Sue?

I have a large, established risk protection practice focused on business professionals. It employs 13 staff, including three advisers, a practice manager, three support staff and six general insurance staff as part of an insurance brokerage.

How long were you with Guardian Financial Planning and why did you move to a new licensee?

In May this year, after eight years running my advice business as an Authorised Representative of Guardian Financial Planning, I chose to move to a new dealer group after Suncorp Group shut down its risk advice business.

When Guardian advised us they were closing their license, we were given six months notice to find a new licensee.

What process was involved in deciding on a new licensee?

I undertook exhaustive research on five different licensees in the marketplace and arranged a meeting of both my advisory board and external strategy specialists, with strong financial services experience to weigh up the pros and cons of each licensee, as well as the pros and cons of applying for my own licence.

Initially we decided to join Centrepoint Alliance as a self-licensed practice under Licensee Solutions (AAP), and did a lot of work with them in preparation. This proved to be a really great learning experience and greatly expanded my professional knowledge of ASIC’s compliance regime. However, I had taken on major commitments with the Million Dollar Round Table (MDRT) involving overseas travel and decided there was too much key person risk in me becoming the responsible manager. While I can work remotely, it is not as easy to oversee the office remotely, especially one going through change. So we decided to transition to Centrepoint as licensee, and look at self-licensing again in the future if the time was right.

I was also concerned that if I chose to licence under another vertically integrated model I may face the same issue again, should they choose to follow a similar strategy to Suncorp.

How difficult was the move?

My immediate concern was ensuring minimal disruption to my business. I was pleasantly surprised by the ease of the transition. I thought it would take three months or more to move across to the new licensee and get back to 100 percent productivity. In fact it took just two weeks before we were up and running with virtually no down time.

How has Centrepoint assisted you in the transition process?

Centrepoint was very helpful and supportive throughout the entire transition process. When we were looking at getting our own licence, Centrepoint explained what was involved. When we changed our mind, they were very helpful in placing us under the licensee model. From a management perspective, Centrepoint took the time to work with me through business health checks and were very constructive in their feedback. I found them very inspiring.

By going through the process, I learnt a lot about my own business. It’s not every day you get to do a strategic stocktake of where you are going and how you operate, even if it confirms you’re heading in the right direction. I feel we are now reset and refreshed for the future.

Did you have to switch software?

Guardian used COIN and Centrepoint uses XPLAN. Because we own a general insurance brokerage as well as running a financial advice practice, we use the cloud-based CRM platform ACT to house and operate our business database. All our data sits in ACT so we weren’t reliant on the immediate transitioning from COIN to XPLAN. This enabled us to keep working while the transfer of information took place.

The underlying systems Centrepoint has in Compass inside XPLAN are very good. They are very compliance–orientated and that gives me total peace of mind. The level of support they give is very strong, in terms of business support, compliance, research and revenue.

Did you lose any clients in the transition?

Out of all our clients, we had five who chose to stay with the Suncorp-direct model. These were clients with old life insurance policies where it made sense for both them and us in terms of our business model going forward.

What would be your advice to any practice owner contemplating a dealer group change?

For any practice, the sudden need to change licensee can seem daunting. If you embrace the process as an opportunity to better understand your business and improve the way you operate, it can be a very rewarding experience.

I would advise any practice looking to change licensee to take your time, do your research and make sure the licensee shares your values and outlook.

Check out the BIG Group to see what Sue and her team are up to.

If you're interested in discussing how we can make the transition seamless for your business, contact us now.