In the less than three years that John McMurdo has led the Fitzpatricks Financial Group the business has grown from $520 million of funds under advice to close to $3 billion, and adviser numbers have grown from 20 to 55. But all of that is beside the point, McMurdo says, and growth in these numbers is a result of the group’s approach to what it does rather than being its objective.

While the bare metrics reflect a business ostensibly in good health, it is the culture of the business reflected in the results of its advisers’ recent net promoter scores that most pleases McMurdo as Fitzpatricks’ group managing director.

“Adviser numbers isn’t a focus for us,” McMurdo says.

“What I think is more meaningful is the number of genuine client relationships an adviser looks after. Take that as not being too many – as being able to deliver a genuine level of service to clients. Genuine clients, not names on registers.”

Client-adviser ratio

McMurdo, a former head of the AMP-owned licensee Hillross and of Centric Wealth when it was majority-owned by private capital investors, says the number of clients per adviser varies depending on the client needs, but a ratio of one adviser to 40 to 100 clients is manageable.

“There’s no hard and fast rule, but it’s not 2500 [clients],” he says.

“We are getting overrun with inquiries from advisers wanting to consider being part of us, but we’ve very disciplined about standards of who we accept into the group.

“We just completed our annual net promoter score of our advisers – two weeks ago – and that came back at +69, which is world-class. To put that in plain English, that’s an average score from our advisers of nine out of 10 – which is pretty much unheard of across an advising community. The advisers love being part of this group, and the way they are supported, so I would encourage other advisers – as opposed to just hearing it from me – to talk to any of our advisers that they want to, to understand what that feels like, to be part of a strongly supportive professional group.”

Institutional restrictions

McMurdo says inquiries from advisers are driven as much by dissatisfaction with how their current licensee’s structure and offering have changed – generally, becoming more restrictive – as they are by Fitzpatrick’s reputation.

“What I hear commonly is advisers, having joined another firm, five or 10 years later seeing that for whatever reason as not being the place they joined,” he says.

“It’s inevitably the culture.

“For context, I share the view that institutions will be there and for certain clients and advisers they will be perfectly adequate, I am sure; and I have no issue with that. What I see, though, is advisers who see themselves at a more professional level of advice, and want to be giving a greater level of objectivity, and sitting firmly on the client’s side of the table, we’re seeing those ‘thinking’ advisers, or the more professional advisers, are showing a higher propensity to want to be part of a genuinely independent and professionally oriented firm.

“A number of them have expressed to me that they are less and less able to operate that way [in the institutional structure] – be that real, or be that perceived.”

McMurdo says Fitzpatricks is attracting advisers from three general areas.

“They are from other independent firms, one; two, they are top-quality advisers who have come from institutions and have chosen to be part of a professional independent firm; and also from other professional services businesses, wanting to be part still of a professional services mentality and culture, but in a specialist financial services group,” he says.

Growth story

But attracting new advisers is only part of the growth story, McMurdo says.

“All of our underlying member firms have experienced strong growth in their own right,” he says.

“We expect that we’ll have further growth and more advisers join us. That said, we don’t have a target on adviser numbers of FUA levels or anything else. We would much rather be a first-tier-by-quality but second-tier-by-size group of highly effective professionals than have any specific designs or targets on size.

“The main evidence for that for us is client advocacy, and advocacy of our advisers.

“That’s a key indicator for us.”

Simon Hoyle is head of market insight for CoreData Research.
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