Over the ditch, the marriage between Australian advisers and their new group schemes is starting to grow cold, according to CoreData 2021 Licensee Research.

The data shows that in their first year following the financial services regime change, 82.4% of advisers thought of their new licensee as a partner.

Five years down the track, the proportion of advisers who still believe their licensee is a partner has halved to 41.4%.

Adviser coach, Tony Vidler, believes that Kiwi advisers could be in danger of seeing the same thing happen here.

“There is a tendency for people to run for the safety of the herd when they don’t know what the impact of new regulations will be. Then two or three years down the track when there is no fear factor, they want their independence again.

“Over time what you see is that people who have been with larger licences over a longer period of time tend to grow dissatisfied because they are craving their independence. It is only the newbies who are saying ‘thank god they are saving us from the new regulations’ that still love them.”

Although the discontent we are seeing in Australia could still be some way off yet for New Zealand, Vidler thinks that it is important for advisers to begin thinking about it now.

He feels it is highly likely that financial advisers will one day grow tired of their membership of large groups.

“It is inevitable that this is going to happen. The big lesson is despite advisers flocking to larger groups, they need to be prepared to go it alone again at some point.

“This is for three reasons: One, we can’t trust institutions. They do not have advisers’ best interests at heart, they have their own shareholders’ interests to worry about. Advisers think that institutions are wonderful trustworthy things and they are not.

“The second thing is understanding that large licences are institutions.

“The third thing is to go back to rule one.”

Vidler thinks that it is vital for any independent adviser starting a relationship with a larger licence holder to make sure they have a prenup in place.

“Fundamentally many advisers in a few years’ time are going to want to wriggle out of these group licences. They need to think about this when they are going into these agreements, and carefully negotiate [their] exit conditions.”

Vidler believes that advisers jumping from independent to group back to independent will be okay in the long run because of their skillset.

“Advisers have a professional relationship with their clients, and the marketing skillset to feed themselves, they can go out and get more clients and know how to market themselves if they need to start again.

“People who struggle with those skillsets of client relations and self-marketing, could find themselves having more difficulty when trying to leave a group scheme.”