Financial planning mentorship programs should be a standard offering across Australian Financial Services licensees, according to Nick Fanto, insurance specialist with Foundation Broking.
Thirty-year-old Fanto says he has benefited immensely from being mentored by an experienced financial planner, after joining the industry at the age of 24.
“I’ve just been lucky that the opportunity fell in my lap. I’m twice the adviser I was five years ago. I have a sharp process, because I had someone show me the way.”
He suggests it’s not only less efficient, but potentially damaging to clients if entry-level financial planners are expected to learn in a live client environment.
“It’s dangerous to learn how to financial plan in front of a client. I believe there should be some form of standardised mentoring, and I don’t know the answer to how [the industry] should do it.”
In his early 20s, Fanto had been working in sales across a number of areas including alarm systems, garage equipment along with the health and fitness industry. While not related to financial services, he says it was “really all about understanding people.”
After obtaining his Diploma of Financial Planning, Fanto was recruited by the principal of an AMP-owned financial planning practice. While here he provided investment, superannuation and risk advice with a practice owned by AMP Financial Planning.
However Fanto says he realised just six months in that the goals held by he and his principal were not aligned. “I decided very early on that wasn’t really for me.”
He then moved to AG Private Advisory, which involved working with Deloitte Partners and their clients, exposing him to a broad range of high net worth clients.
It was around that time he began thinking about specialising, with planners in this business largely concentrating on either risk or investment advice.
“To be an investment adviser, you need to live and breathe it…I just found it wasn’t for me. I didn’t like the idea if I was working for a company I was basically on-selling their investment strategy.”
“It just made me think ‘what happens if they get it wrong? It’s me delivering this advice, I’m the face of the business.”
When that business ceased trading in the midst of the global financial crisis in 2008, he decided to set up his own practice, aged just 24, under the AFS license of Petronas Risk Specialists.
He had been working with some of the more experienced advisers who were providing risk advice to clients, who had been sourced via Petronas’ referral partnerships with a number of accounting firms.
It was here that he encountered Patrick McLaughlin, managing director, Foundation Broking.
“Patrick held the same risk philosophy, and had been in the insurance business for a long time.
“I was 24, I was young and motivated and wanted to get out there. But there were obviously a few things I needed to sharpen up in my process.” He says it was a natural decision to bring his business inside of McLaughlin’s.
Opening doors
He says working with Patrick enabled him to get in front of clients he wouldn’t otherwise have been able to.
“Patrick gave me the opportunity to reach a lot of higher net worth clients, to do a lot more buy-sell and a lot more key man insurance work and really up-skill off the back of that.”
The key things Fanto says he needed to work on were around the process and delivery of financial advice to clients, compliance systems and writing of statements of advice.
“It totally altered the way I worked. I always had a strong ethical relationship with my clients, but it’s also a matter of how you present that,” Fanto says, adding that “if you don’t have that mentor, you’re flying blind.”
“A lot of older advisers want to keep all their knowledge in-house, they don’t want to share their intellectual property.”
He suggests licensees should perhaps more actively partner younger advisers with those that are more experienced. “Getting some of the older heads to come in, talk about their process and how they do it, rather than say ‘here you go, figure it out.’”
“Not every 55-year-old business owner wants a 24 year old broker who’s been self employed for six months to look after his financial affairs.
