Troubled dealer group WealthSure has begun the slow task of rebuilding its creditability among independent financial advisers, with its national roadshow concluding in Perth on Tuesday.
The group’s recently appointed chief executive, David Newman, announced it will implement a new technology system to improve the monitoring and surveillance of advisers, review its approved product and platform list and professional indemnity cover, restructure its investment committee and appoint an external consultant. All this comes as part of an expensive eight-month transformation program to rectify operational shortcomings uncovered during an 18-month investigation by the Australian Securities and Investments Commission.
WealthSure, which accepted an enforceable undertaking from the regulator on September 2, has already engaged external compliance and risk management firm, Pathway Licensee Services; practice management consultant, Business Health; technical services company, Strategy Steps; marketing expert, Eddie Lees; and client engagement platform, Astute Wheel, to help deliver on its new “Adviser Academy” proposition.
Around 200 of WealthSure’s remaining 230 advisers attended the roadshows, at which the group unveiled details of its Adviser Academy. The Academy will offer a structured and tailored program to help advisers review and reposition businesses for the next three years. Participants will be taught how to articulate their value propositions, segment their client bases, and properly price and deliver on their value propositions. Newman, who had been consulting to WealthSure for some time, earlier this month replaced the firm’s co-founder and managing director, Darren Pawski, who entered into an enforceable undertaking with ASIC.
Letting go
Newman said it was regrettable that the dealer had recently “let go of” 100 authorised representatives, however, he believed the Adviser Academy would help it retain and attract advisers.
“We would’ve preferred to have held onto some advisers who left, but the vast majority were simply too small and would’ve potentially occupied too much time in terms of monitoring and supervision – time which could be spent on more core advisers,” he said.
“We are raising the bar and being more selective when it comes to who we deal with and how we recruit. We want to be a highly respected non-aligned Australian Financial Services Licence, and we know we have to earn that respect again.”
Two former WealthSure advisers, Brian William Veitch and Colin James Oberg, have been permanently banned by ASIC from providing financial services in the last two years. Oberg withdrew over $1.55 million of client funds without their authorisation, while Veitch committed 22 counts of fraud when he transferred approximately $500,000 from seven client accounts without authorisation.
Measured growth
Newman said growth was still a priority for WealthSure but the group was not after “growth for growth’s sake”. Instead it would pursue “measured growth”.
It will target larger practices, ideally with two-to-three advisers and $300,000 to $500,000 in revenue. However, there are no hard and fast rules, he said.
“A sole practitioner with $250,000 in revenue could fit our model if there’s a cultural alignment and they want to take their business forward,” he said.
Newman, who spent six years as head of adviser distribution at Plan B before it was listed and then sold to IOOF in mid-2007, believes non-aligned AFSLs must adopt a holistic, vertically integrated model in order to survive and thrive.
It is likely that WealthSure will look to build internal funds-management capabilities and offer a range of model portfolios and multi-manager funds. It is also likely the group will take steps to run its own private-label investment and administration platforms. WealthSure currently employs 14 staff. It must lodge a draft remediation plan with ASIC by December 20.
