EntreHub was right - it is all over for Suncorps Guardian Advice as news was confirmed today that the company would be shutting the troublesome business down. The following is from Suncorp today:
Suncorp Life has confirmed today it will begin a six month transition out of its self-employed, aligned adviser networks, Guardian Advice and Suncorp Financial Planning, in order to simplify its distribution model. This means that from mid next year, Suncorp Life will no longer manage these self-employed networks.
Acting CEO Suncorp Life, Jeremy Robson said the decision came after much consideration but ultimately supported the business’ direction.
“We have made the decision to simplify our distribution model in line with our strategic priorities and in the interests of advisers and customers. We’re focused on working with our independent adviser and direct distribution businesses to support the evolving needs of customers,” he said.
“Over the next six months we will be working closely with both the Guardian Advice and Suncorp Financial Planning advisers to explore options such as transitioning them to other licensees in the market if they choose.”
Suncorp Life remains an important part of the One Company. Many Brands model, providing a range of life insurance and superannuation products through the Suncorp Group’s brands.
Mr Robson added the immediate priority was the smooth transition for self-employed, aligned advisers.
“Our immediate goal is to work closely with advisers to identify their options and make the transition as easy as possible,” he said.
The road may have come to an end for the Suncorp backed Guardian Advice financial planning business after a year that could only be described as regrettable. Rumours have begun circulating in the market place that Suncorp is ready to throw in the towel leaving the roles of hundreds of advisors and employees in doubt. Established back in 2001 the company’s website claims to look after more than 130,000 clients Australia wide with a focus on superannuation and investment advice. In May this year the forecasts for the business were relatively upbeat with then Guardian Executive Manager Simon Harris telling investor daily that he believed that while the Future of Financial Advice had seen “a lot of movement” in the sector that had “unsettled a lot of advisors” there was still room for growth.
Back in 2013 Mr Harris was also upbeat telling media that "There are a lot of baby boomers getting ready to retire and generally, due to the growth and success of those businesses, Gen X and Y advisers are not able to access the capital to take over those practices," and also went on an aggressive financial planner recruitment drive saying that "We're also providing the physical office for new advisers to join - so it will be a model Guardian office where there will be office space for up-and-coming junior advisers, but we're also tying that in with our buyer of last resort,"
Earlier this year the Australian Securities and Investment Commission imposed license restrictions on Guardian stating that the business did not have “adequate arrangements in place to ensure it was complying with its general obligations as an Australian Financial Services Licensee”. ASIC also went on to say that the business had poor record keeping and failed to monitor the competency of its advisor representatives. While ASIC did indicate that Guardian was being helpful in dealing with its concerns its Deputy Chairman Peter Keel said at the time that “there was an ongoing risk that unsuitable advice could be provided by Guardian Advice and its authorised representatives”.
Financial planners involved with the group had been embroiled in controversy previously with one financial advisor pleading guilty to falsifying 65 insurance applications between 2009-2011. Susan Heathwood went on to plead guilty in a Sydney court with more than $300,000 being retrieved. It has been previously reported by the Australia that Executive Manager Simon Harris was previously aware of ASICs concerns of the companies recruitment of dozens of advisors “from a crooked rival” in 2013 but went ahead with the drive anyway.
Step forward to today and rumours have started to circulate in the financial planning industry for the last week about the future of the business with several advisors external to Guardian telling entrehub.org that they believed that Suncorp will either close the business down or sell it off with one saying “it’s been more than a year of worry about what Suncorp would do and given the recruitment practices of the past it’s hard to think that they would be able to pull themselves back from the edge without a good quality business plan.” but as another advisor told EntreHub.org selling it off was not a viable proposition given that they only held a"license" so there was "nothing really to sell off"
One of the advisors also told EntreHub.org that “my phone went into meltdown last week with calls and text messages coming in from a lot of people asking if I knew what was going on. I got in touch with Guardian (more than a week ago) and I am still waiting for a call back. What I do know is that advisors have been called into a national phone hook-up tomorrow and there are only two ways it can go – good news or bad news.”
Amanda Boswell, Manager for External Relations at Suncorp Group told EntreHub.org that “ïts company policy not to comment on market speculation.” Which means everyone will have to wait to see if the rumours are true and that Suncorp is ready to throw in the towel or if the business will survive to fight another day as Executive Manager Simon Harris has told media in the past.
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