Insignia hives off financial advice arm in bid for profitability
Wealth giant Insignia Financial will retain its potentially lucrative superannuation and digital financial advice offerings while spinning off its self-employed advisers into a standalone business, as part of an overhaul designed to accelerate its struggling advice arm’s return to profitability.
The superannuation and digital capabilities are the two most likely to profit from the government’s new financial advice rules. Super funds are set to gain some relief from rules that currently bar them from giving members financial advice.
Insignia CEO Renato Mota said there was “a significant opportunity” for the company to capitalise on these changes.
Renato Mota reckons splitting Insignia’s advice offerings will drive profitability. Eamon Gallagher
Insignia, formerly known as IOOF, will bankroll the new self-employed adviser practice for 12 months, but anticipates its stake in the outfit will gradually reduce as advisers bought into the partnership.
Insignia shares were up 7 per cent to $2.93 on Thursday, after a quarterly update from the company revealed the advice restructure, and that its funds under management and administration grew by 1.3 per cent to $295 million. It also reported positive net inflows of $667 million on a continuing basis, meeting its target for the financial year.
The rule changes may also pave the way for more digital advice offerings, while the retirement income covenant will increase super funds’ demands for advice.
“There’s a significant opportunity for Insignia Financial around linking advice and superannuation; there is a clear need and opportunity to bring those two together,” Mr Mota said.
“This [structural overhaul] provides greater capacity for the organisation to really lean into those
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