John de Zwart, managing director of PIS parent company Centrepoint Alliance, says that licensees who think they can survive in the post-FOFA environment without being vertically integrated are ‘deluded and naive’.
The dealer group head commented that, ”with grandfathered volume rebates set to fade away over time, alternative revenue streams need to be built into financial planning dealer groups” and used the two Centrepoint in-house products (Ventura and All Star Funds) as an example – “Ventura is managed by Russell Investments. We’re not the responsible entity – we have that outsourced to Equity Trustees but we do the coordination and management – the selection of who is the investment manager underneath that,” de Zwart said.
Centrepoint is also looking at creating low volatility, outcome-orientated in-house products and has put out a tender to a number of investment firms. de Zwart commenting that, “we’re looking to provide some non-implemented portfolio solutions to our practices before Christmas and then implemented solutions hopefully in the first half of next year.”
De Zwart conceded that, there was a real need in the independent space for a financially secure, good proposition service model to allow people to migrate away from the institutions back into the independent space. “We want to build that business that is going to support them, and a big part of that is being financially strong – and we have to get reasonable margins from providing our services,” de Zwart said.