The private wealth division of Macquarie Group has taken a hit after more than 20 advisers left amid concerns about the Australian group's narrow focus on wealthy clients and its new fee and remuneration model.
The advisers, many of whom were key revenue writers, jumped ship to rival firms across Sydney, Melbourne, Adelaide, Perth and Canberra before Christmas in advance of a new structure due to be introduced this year. It is understood that Macquarie has between 170 and 200 advisers, the Australian Financial Review reports.
Macquarie Private Wealth and Macquarie Private Bank advisers will shift to a new remuneration model starting from April 1, which will comprise salary and profit share. At the same time, the group will discontinue the practice of receiving grandfathered commissions.
Other sources claim the main reason to defect was Macquarie's shift in gear last year to merge its private bank and private wealth businesses and focus exclusively on wealthier clients after the Hayne royal commission revealed industry-wide troubles in the retail advice sector.
"The pay models and the commissions thing have nothing to do with why advisers are leaving," one ex-Macquarie adviser said. Instead, the adviser added, the reason behind the departures relates to new rules that require existing clients to have A$1m in investable assets or provide revenue of at least A$10,000 a year. The A$1m cut-off is a problem for many existing clients, the adviser said - especially pensioners in drawdown phase, one ex-Macquarie adviser told Australian news outlet Professional Planner on condition of anonymity.
A spokeswoman for Macquarie said the departures were triggered by the decision to scrap adviser commissions.
"Last year we made industry-leading changes by moving all of our advisers away from commission-based remuneration and, as expected, we've seen a small minority of advisers choose to depart, as they did not feel aligned to the future of the business," she said.
"We believe these changes are the way forward for our clients and our people and are in line with both changing expectations and our commitment to industry best practice."
In a May press release, Macquarie's head of wealth management, Bill Marynissen, noted that the decision to focus on HNW clients "impacts a number of advisers".
"Macquarie is supporting these advisers in a number of ways, including by facilitating discussions with other firms and assisting with their transition," the statement read.