Adviser case study | Choosing a new licensee

Business Development

Interview with Lance Milham, Director, CB Financial

With all the choice and movement in the market, how does a financial advice firm go about selecting the right licensee partner for their business?

Tell me about your business, Lance.

CB Financial, formerly known as Corporate Benefits, has been providing financial advice services dating back to the 1960s. During the 80s and 90s, the firm serviced clients who required advice in relation to insurance and superannuation. In 2004 CB Financial merged with the planning division of an accounting and business advisory practice to also provide wealth creation advice.

What was your motivation for changing licensees?

In May last year, after many years running our advice business as an Authorised Representative of Guardian Financial Planning, we moved to become an Authorised Representative of a Centrepoint Alliance dealer group.

As we were unhappy with a number of aspects of their support, we had actually been looking at other licensee options for some time before Guardian advised us they were closing their license. After their announcement, we were given six months to find a new licensee.

What was your process in deciding on a new licensee?

We were already well down the track with Centrepoint Alliance and two other firms, prior to receiving our notice from Guardian. Within 24 hours of Guardian announcing the closure of their licensee business, close to 20 licensees approached us.

To ensure a level playing field, we put together a Request for Proposal where we asked 30 or so questions relating to their business. While some were simple fact finding questions, others reflected our key strategic imperatives including asking potential licensees what their philosophy was in terms of helping to grow our business. Guardian offered very little advice or support in this area. Instead, the focus was on compliance and product hence why we were looking for someone to be our business partner.

From the 17 responses, we put together a decision matrix weighted towards what we thought were most important. This was then shortlisted to five licensees and, after receiving feedback on how our advice and support staff interacted with the licensee staff, reduced the number down to a final two. We then met at a board level with the relevant people to make our decision and that is how Centrepoint won the role.

How long was that process?

Three to four months.

Was the transition to a new licensee difficult?

The transition to Centrepoint was not difficult. What was difficult was adjusting to new ways of doing things. Our biggest legacy issue was transferring client data from Guardian’s COIN to Centrepoint’s XPlan. The data that came out of COIN was in a format that wasn’t useable, had to be updated, and we lost a lot of history around advice creation and modelling.

Did you feel that Centrepoint helped you with the transition?

Centrepoint was helpful from day one. I don’t really know how you judge it but from talking to other Guardian advisers, Centrepoint made it easy for us to come on board.

Did you lose any clients in the transition?

Not as a result of the transition. It happened to coincide with a few other changes happening here and a couple of advisers moving elsewhere.

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

Think about it, think about it hard. Really identify why you are moving and then identify the licensee who has got the will and the wherewithal to work with you to achieve the desired outcome. Don’t underestimate just how much work is involved and potentially how disruptive it can be for your business.

What value has Centrepoint added to your business?

Centrepoint has added value in many ways. The way they have supported us in the transition and understanding their policies and processes. There is always someone willing to help. Centrepoint’s technical team is second to none, and you get sensible and commercial responses. On the practice management side, nothing is too difficult. There is always someone trying to help you solve a problem. In terms of leadership, they work with me on the direction of the business. They cover all bases.

If you're looking for a dealer group who can support your firms's growth, drop us a line and one of our Business Consultants will be in touch.

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