Neil Salkow had reservations about charging clients a fee for his services and setting up a truly independent practice. But he learned very quickly that most of the problems he thought he’d face were imaginary. Simon Hoyle reports.
Don’t ask Neil Salkow how the Future of Financial Advice (FoFA) reforms will affect his business unless you’re into short answers.
“It won’t,” he says. And don’t ask him how FoFA will affect his business’s revenue.
“It will stay the same,” he says.
Nothing to see here, folks. Move along. One benefit of building a truly independ-ent financial planning firm is that regulatory upheaval is largely a non-event. Opt in? Not an issue. Abolishing commissions on life insurance? No worries.
And the key to this is independence – a definition that Salkow says means not accepting commissions of any kind, including on risk products, or asset-based fees.
Salkow also says that true independence means that when the financial planning industry cops bad press, as it does from time to time, he doesn’t really feel as if he is part of the industry being targeted.
‘It became a revolution. She was happy with that; I got paid; she got the best advice’
“I used to,” he says. “I used to feel that way. I don’t really any more. On the odd occasion I might read something and get a little bit upset by it, and then go, ‘But that’s not me’.
“Ultimately, my circle of influence and people who know me and the other trusted advisers that I work with, and my clients, they all know that’s not what we do, and that’s all that matters. I don’t really pay much attention any more to bad press.”
Like others who have moved from an accounting background into financial planning, Salkow completed a university degree and found himself working in accounting roles.
“But I never really enjoyed it,” he says. “I always wanted to be more in front of people, and basically harnessing my passion and love for numbers and helping people.
“I had friends who were in financial planning, and through discussions with them I real- ised that is the avenue I want to take, and what I want to do with my career and my life.”
But his first taste of the industry was a bitter one.
“I looked into financial planning roles and found [an introduction] that lasted a week that was really just about how we go about doing business here,” he says.
“I thought, ‘OK, fine, you keep going about doing your business the way you do it, and I’ll do it somewhere else’. I didn’t like the whole approach – it was entirely about product, and I didn’t see any planning being done whatsoever.
“So I went to another planning firm that was independently owned, and gained a lot of experience there – client-facing stuff as well as the back-office and compliance and just getting a real feel for how a financial planning business is run.
“I had a mentor there, which was just fantastic, and then a little bit down the track I was presented with an opportunity by another firm to purchase a client base, to run my own business. I considered that for a full year before doing it, and basically jumped in and did it, and ran my own client base, which was probably the best and the worst decision I have ever made.
“I gained a lot of experience there and shaped my service offering in that year of owning that particular client base. It was during that time that I approached Matthew [Ross] because I just felt that the service the clients had been given in the past and the way I was taught that financial planning was done, I didn’t necessarily agree with the restrictions on some of the advice that we even placed on ourselves, based on the nature of the way that we charged. I just wanted to find out how others were doing it – if it could be done. That was the reason I approached Matthew in the first place.
“I approached Matthew around three years ago, having looked up myself ‘independent’ advisers and found his name – this was while I was living in Melbourne. I approached Matthew to find out a bit about him, how he goes about his business. He was very gracious in sharing with me all his knowledge. And from there we clicked, and started sharing ideas and information.
“It got to the point where we thought it would be beneficial to work together.”
Ross and Salkow set up Roskow Independent Advisory together, and in 2009 Salkow moved to Brisbane to set up the firm’s second office.
While there’s a legal defini- tion of independence, Salkow says that in practice it’s about making good decisions for clients.
“Making good decisions is all about having lots of options,” he says.“When you engage a financial planner who is non-independent, they have a pre-packaged solution ready to go, so they’re not going to be presenting all of those options.
“Independence and the way you charge, or the means of remuneration for a financial planner, are completely inter- linked. So if a planner is making money, in any way, shape or form, either via commission or a percentage basis, then there are going to be conflicts and there are going to be options not made available to clients.
