Koda capital, the financial planning business headed by former MLC chief executive officer Steve Tucker and former JBWere chief executive officer Paul Heath, has appointed its first financial planners, with Sean Abbott and Peter Dunn joining the firm.
Before joining Koda, Abbott established Aqua Private Wealth, in Neutral Bay on Sydney’s lower north shore, and previously worked with Woodbury Financial Services. Both Aqua and Woodbury were licensed through MLC.
Dunn is a former head of institutional equity sales for Citi, and has previously worked with accounting firm HLB Mann Judd in Sydney and Singapore.
Abbott and Dunn are the first financial planners to join Koda and to become equity partners in a firm that its founders believe can eventually reach about the same size as a mid-tier accounting or legal firm.
The business was set up late last year to capitalise on advances in technology that now enable planning businesses to operate on lower fixed costs, and to create business structures more akin to professional partnerships than to traditional financial planning practices.
Structure is simple
In December, Tucker told Professional Planner that the idea behind the firm’s structure is simple: “Get highly professional practitioners in the advice space, whether it be from private wealth firms, whether it be from traditional financial planning firms; bring them together in the Koda model where they are partners in the firm and they own equity in the company; and generate our fees and revenue from the clients.”
“At a certain point in scale we can sustain this business by bringing in new talent; over time retiring partners; and creating, essentially, a professional services firm which fills a gap that the high-net-worth end is looking to be filled, around independent high-quality advice,” he said.
Heath told Professional Planner that advances in technology allow Koda to set up with relatively low fixed costs. It will use Powerwrap for investment reporting and execution.
“What has changed is the ability to access low-cost, high-quality products and platform technology,” he said.
Koda’s advisers will participate in the growth and the profitability of the business, and this will form part of their overall remuneration. Heath says that advisers will receive “the same economic return” as advisers in other financial planning or wealth management businesses, but the structure aligns them with the success of the business.
“We can genuinely make money by giving advice rather than making money by selling product,” Heath said.
“Giving good advice to private individuals is a noble cause and we share the view that we think it should be a profession.”
