Sidney Lim, former Managing Director of BDO Wealth Management (NSW) said that his team had “conducted an extensive search over the last year for a wealth management firm that lived the professional values and standards that his group has delivered and valued for many years.  We have been thoroughly impressed by the professionalism, ethics and caliber of the Fitzpatricks team, and we are delighted to be part of this professional firm.”

John McMurdo, Managing Director of Fitzpatricks Private Wealth said that Sidney Lim and the former BDO team were “a perfect fit with Fitzpatricks.  They practice the same client first approach to business and are utterly professional in their approach”.  They have built a great business serving high net worth clients and the team at Fitzpatricks look forward to helping them deliver even more for their clients”.

Sidney Lim added that “not only is the advice approach of Fitzpatricks up there with the best he has seen, but the investment management methodology via their subsidiary, Atrium Investment Management, has delivered outstanding results for clients over many years.  These two factors combined were key to our choice of Fitzpatricks”.

The Fitzpatricks group recently announced the appointment of McMurdo as group Managing Director and Chris Cuffe as a Director.  The group already strong in Brisbane and Sydney with offices in other major cities, plans to expand its national presence but with strict admittance criteria.  The firm models itself on a professional services ethos with high expectations on professional standards and client care.

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“Many of the financial advisers who come to us are in their 30s and 40s running practices within one of the big licensees,” Ms Fuchs said. “They are career financial advisers, fast-tracking their businesses, but their revenues are not at the level where they can justify paying for the bells and whistles offered by the big end of town, such as BDM support and hands-on practice management support.”

She says some of these advisers are on older packages that provide open architecture in terms of Approved Product List (APL)s and are paying a premium in licensee fees. “In some cases they are paying $15,000-$20,000 more than they need to,” Ms Fuchs says. “That’s like paying for broadband services and getting dial-up. It’s an absolute fortune for them and it’s money they believe can be better spent.”

Ms Fuchs said some licensees are very dismissive when defending their dealer group fees, arguing it’s the cost of offering an open architecture APL. 

“The problem with this argument is that they instantly jump to examples such as Morrison Carr to prove their point,” Ms Fuchs says. “This is very unfair. We are aware of a number of quite small niche licensees that have a strong corporate governance culture. These dealer groups have a very strict quota on the number of advisers they service and very clear advice process requirements to manage their compliance risk. Importantly, this makes them affordable to younger advisers because they are only getting the absolute essentials.”

Ms Fuchs says she is very disappointed by comments currently being made about smaller licensees in the wake of the cancellation of Morrison Carr’s financial services licence.

“The level of judgement and gossip undermining boutique groups and practices is quite malicious,” she said.  “There are people in the industry tarring all small licensees with one brush; suggesting that because a licensee is small, inexpensive, doesn’t have a cast of thousands and yet still offers an open APL, it can’t have good corporate governance and robust levels of compliance,” she said. “I absolutely reject that argument. In the work we do matching advisers with licensees via My Dealer Group we have found there are some really good quality boutiques out there.”

Ms Fuchs also highlighted that big doesn’t always mean better.  “As we all well know, there are some very large dealer groups that are currently, or have been, in enforceable undertakings. For people to say that operating under a smaller AFSL translates to a risk to the adviser in terms of compliance and corporate governance is extremely unfair.”

No dealer group, regardless of size, can afford to ignore the demands being made by the new breed of adviser, according to Ms Fuchs.

“In fact, these are the advisers dealer groups should be recruiting, because they are very well-educated, they don’t have ingrained bad habits, they’re growing revenue businesses and, generally speaking, they are working with other professionals in centres of influence to build their business,” she said. “This is a huge growth segment. Rather than being dismissive of their needs, dealer groups must develop a much better response to them. My advice is: ignore them at your peril.”

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“In putting together the No More Practice series, we have gained unique insight into the challenges facing Australia’s advice industry,” said Stoykov. 

“We realised there needed to be a more sustainable and collaborative way for these groups to partner up, and the long-term health of the advice industry and quality advice outcomes for Australian consumers depended on it.” 

The result is an interactive, online directory and meeting place called The No More Practice Marketplace which will launch on 1 September 2012. The Marketplace concept was conceived following discussions with institutionally aligned dealer groups about effective and cost-efficient ways of recruiting practices, as well as with advisers and accountants who wanted to identify the meaningful differences between licensees. It will facilitate approaches and conversations initiated by planners and accountants who can connect with dealer groups they are interested in talking to. 

“Financial planning and accounting practice owners told us that alignment of business and value propositions with those of a dealer group has become the crucial point in their decision-making process but is not always easy to identify and assess,” said Stoykov. 

“There is a real need for a simple and confidential way to identify and connect with their dealer group of choice, and get the level of information, access, and transparency they need. 

“Practices are also often also small businesses so, like any entrepreneur, owners are looking for support, connections and services that fill gaps in their offering or allow them to benefit from scale and cost-efficiencies that dealer groups provide.” 

Similarly, dealer groups have been challenged by the often time-consuming, expensive and inefficient process of responding to approaches and pursuing practices, said Stoykov. “They want assistance in showcasing their offerings from marketing support and communications, compliance support and technical services, through to education and training, remuneration and, most importantly, their unique value proposition for target practices. 

“There is also a growing market for dealer group recruitment of accounting practices and conversations between these groups are also catered for.” 

The Marketplace also allows practices to make contact with other relevant service providers, such as law, broking, technology, insurance, financial products and lending businesses.

“Interest in The Marketplace has been strong with more than half the market already signed up,” said Stoykov. “The big five advice brands – AMP AXA, BT, Westpac, Commonwealth and NAB MLC have signed up, as well as key independents that have approached us to be listed.” 

“I think the market is welcoming a new way for both practices to connect with their dealer group of choice, and for licensees to recruit target practices and reduce churn in their network. The big players in the industry are taking a step back now and looking at the real value – and cost – of this approach,” said Stoykov.

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“This is an important appointment for us, with the role covering the development and delivery of key financial planner services to all our Advice businesses:  BankSA, Bank of Melbourne, Magnitude, Securitor, St.George and Westpac,” Mr Spiers said.

Wes is a financial services and wealth management specialist with experience spanning advice, product and platform development as well as wealth management administration. He has deep experience garnered over the past 15 years working across four continents.

Wes joins BT Financial Group from Bravura Solutions, where he has worked for the past five years, his most recent role being Head of Operations – Australia and Asia. He has also held senior roles at AMP in Corporate Strategy and Product Development.  And earlier in his career Wes worked in a number of paraplanning, financial planning and technical advice roles.

Wes’ appointment is part of BT Financial Group’s continued commitment to developing market leading capabilities for planners that ensure they have access to the best support and tools enabling them to service their clients to the highest standards in the industry.

“Practice management is the lifeblood of the services that underpin the high quality advice that our planners bring to their clients,” Mr Spiers said.

Of his new role, Wes says, “I’m extremely excited by this opportunity as what we do drives to the heart of what financial planners rely on to provide quality strategic advice to clients – and that is what this industry is all about.”

Wes is responsible for:

• Dealer services for bank channel and dealer group planners
• Technical support & services
• Para-planning and advice documentation
• Research and investment strategy
• Practice & professional development

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