In the second instalment of our Next Generation series, Professional Planner looks at how auditing financial advisers a decade ago got Andrew Chan interested in crossing the table.
At 32, Andrew Chan is a partner and senior financial adviser at Henderson Maxwell specialising in self-managed superannuation funds (SMSFs).
He initially became interested in becoming a financial planner through a background in compliance and risk management.
“I used to audit financial advisers a decade ago and, given the varied standards of advice, I found there were often best intentions but rarely true quality, conflict-free advice,” he said.
This was soon aligned with superannuation.
“I saw an increasing trend in 2008-9, where Australian’s who had placed more than a $1 million into their superannuation were becoming disheartened and looking for an alternative to bank-style advice driven by a sales culture and a vertically integrated supply chain,” he said.
“At the time the financial markets had performed poorly and there were a lot of frozen funds – fixed income funds, REITS and unlisted funds. This all could have been mitigated to a greater extent through transparency, active asset allocation and a quality adviser-client relationship.”
Client base
Chan (right) describes his average client as between 55 and 65 years of age, heading into retirement and seeking holistic financial advice to optimise their investments, minimise their tax and boost their income in retirement over the long term.
“Our clients generally have between $500,000 and several million to invest, and come to us for capital management and a strong personal relationship,” he said.
“A segment we are hoping to focus on further is what we call our Family One program, where we are looking to further assist our clients’ children – aged 35 to 45 – to start their financial journey sooner so they can have a similar lifestyle to their parents.”
Independent and qualified
While Chan concedes there are increased regulatory burdens with having an Australian Financial Services Licence (AFSL) as opposed to being licenced through a dealer group, he believes wholeheartedly that the only way to give good advice is to focus on the strategy and the client’s individual needs and circumstances rather than have a particular focus on a limited range of products.
“As a business, we aim to be at the cutting edge of portfolio management and have built a significant client base around quality advice relationships and active asset management,” he said.
Aside from his SMSF Specialist Accreditation with the SMSF Professionals’ Association of Australia Limited (SPAA), Chan has an Advanced Diploma in Financial Services from Kaplan, a Graduate Diploma in Compliance from Charles Sturt University and a Graduate Diploma in Applied Finance from FINSIA. He is currently studying a Masters of Applied Finance.
Aligned with standards
Of the industry associations, he pays the most attention to SPAA but is interested in the work of the Financial Planning Association and Association of Financial Advisers.
“There has been a lot of talk about establishing a code of conduct… and I believe establishing a benchmark for standards in financial planning is vital and for us to be seen as a profession. A fiduciary responsibility to our clients seems essential, if not natural,” he said.
“A code of conduct established for the reasons of excellence and professional standing for the sole reason of providing a better outcome for everyday Australians should be reason alone. To take advice and remove conflicts to the point where planning firms must offer either an independent (whole of market) or limited advice fee-based service, this would definitely be a standard worth aligning oneself to.”
