Virtue celebrates 21st anniversary…& calls for pragmatic approach to FoFA

Dr Tony Virtue from Virtue and Partners is celebrating 21 years in the financial planning industry.

Dr Virtue built the business – which was once a member firm of Associated Planners, the group that in 2004 sold to Challenger for a substantial $100 million – from the ground up.

“Virtue and Partners is now a boutique financial planning business,” Dr Virtue says. “We hold our own AFSL and have a total of four planners and four administration staff.  It’s a source of constant joy to me that my daughter works with us two days a week while studying at university and her mother also makes a substantial contribution.  I believe family businesses are still the cornerstone of financial planning.”

Over the course of his 21 years in the industry, Dr Virtue has invested heavily in education. He is a CFP, a mortgage broker, holds a Bachelor of Business (Financial Planning), a Masters of Applied Finance and is a Doctor of Business Administration. He is a member of all six financial services industry associations, has published a book on microfinance, has spoken at conferences around the world and is an Adjunct Professor and Lecturer in Financial Planning at Flinders University.

His story is almost by definition a rags to recognition one.

“My grandfather was a rag and bone man in East London – think Steptoe and Son.  My father left school at 14 and fought in the Second World War at 16.”

In search of a different life, Dr Virtue and his solitary suitcase migrated from the UK to Australia on the points test in 1987.

“I decided almost immediately to start out as a life insurance adviser,” he says.  “I had no clients, no staff, only a car for an office, and two milk crates as props. But step by step and day-by-day, things got a little bit better.”

He still sees claims from those days and he still counts delivering claims that impact on the lives of his clients as one of the highlights of the job. But as time went on and he gained more qualifications, he began providing more comprehensive advice.  “As best I can be, I am a holistic adviser,” he says.

Today, Virtue and Partners looks after 3,000 clients from all walks of life.

“We have some very wealthy clients but we also look after Centrelink clients. We help out at a soup kitchen. We do it because we want to make a difference. We want to help all Australians, irrespective of their financial circumstances.”

It is his concern for these clients that is prompting him to speak out against some elements of the Future of Financial Advice (FOFA) reforms.

“My concern is that the introduction of FOFA will disadvantage the already disadvantaged,” he says.

“The cost that things like opt-in and annual fee disclosure will add to financial planning businesses means advisers won’t be able to service people who really need help.  I’d hate to see financial planning become an elitist service just for the very rich.”

He believes the Government is destroying the financial advice industry in order to serve sectional interests, namely industry funds.

“The consequences of ideologically-driven legislation appear to have been poorly thought-through,” he says.

“One of the most serious consequences is that while the Government undermines the investment community at every opportunity, consumers will not be inclined to invest. Equally serious is the overall loss of confidence in the sector, due to the uncertainty over FOFA and the projected loss of many thousands of adviser and support jobs. I know of senior advisers, who have a wealth of knowledge and experience in the industry and much to offer consumers, who are selling up and retiring early in disgust.”

Late last year Dr Virtue organised a Liberal Party fundraiser to support the work being done by the Opposition to oppose elements of the FOFA reforms that threaten the advice industry. A hundred financial services representatives, including advisers from every state, industry leaders and the heads of all six industry associations attended.

“The reforms in relation to financial advice are too heavy-handed and prescriptive,” he says. “The Government has taken out a sledgehammer to smash an ant. Most advisers work hard for their money and take their responsibilities very seriously.”

Dr Virtue argued that problems like Storm Financial and Trio were as much about regulatory failure as anything else and it is time to consider the bigger picture. “The Government needs to look through the immediate electoral cycle at the real long term needs of Australians,” he says.

Dr Virtue says it is also time for the industry to show genuine, collaborative senior leadership. “We have been profoundly misled in this process and we need to stand up for ourselves and get a bit of respect,” he says. “The first very obvious thing we need to do is call to delay FOFA until a full regulatory impact statement is completed.”

However, despite the considerable challenges facing the industry today, Dr Virtue says he wouldn’t be in any other profession. “For me, helping people is a passion that never goes away,” he says.