In the thick of the global financial crisis, when other planners were hanging on for dear life, Damien Burns did something both controversial and brave.
Burns was a senior adviser with one of the banks, and he moved his clients from an asset-based fee model to a fee-based set-up.
It was a matter of principle, and not a decision that Burns took lightly.
“As the GFC really took hold, I could see that was the best thing to do for my clients,” he reflects. “Some of my clients’ fees increased as a result, while others decreased.
“I was nervous about actually doing it, but I knew I had no choice. I had to think of how I would like to be treated as a client and this was the answer.”
Burns also reconciled himself to the fact that he might lose some clients – but in the end, that never happened.
“I didn’t lose a single person, not one,” he says. “I was able to break down the fee structure and explain exactly how they were being charged and what each fee meant.
“And that was something they often had not had before.”
The move spelt the beginning of the end of Burns’ tenure with big banks. After leaving and joining another bank, he found himself battling the same conflicts of interest and so, four years ago, he went out on his own.
“I think the banks have a lot to do with the fact that financial planning is still considered an industry and not a profession,” he says. “There is a lot of pressure on advisers working in those big institutions to meet certain targets and see 20 people a week, and there are a lot of people going on stress leave.”
Burns wasn’t going to be one of them, so when he formed D&M Financial Services, he made sure he set up his business to benefit the client, eventually securing his own licence last year.
“I didn’t want to be licensed under one of the big banks because it would limit the range of products that I could recommend,” he says. “While it’s important to be fee-based, it’s also important to be self-licensed, so you’re not limited to what the approved product list says.
“It’s not too hard and it’s not too costly. I think there is a myth that it’s very difficult to become self-licensed, and I think that is what the larger institutions are happy for people to believe, but it’s not the case.”
Burns, like many advisers, has been following the evidence emerging from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry closely, and has no doubt what needs to happen for the industry to become a profession.
“Vertical integration needs to end,” he says. “You can’t have the product market dominate in the distribution channel and still retain independence.”
Despite the challenges that planning faces, Burns is glad he gets to do what he loves for a living.
“When I left the big banks, I nearly didn’t come back to planning,” he says.
So what kept him in the game?
“I think it was because when I saw good advice being given to, and then taken on by, clients – even if it was as simple as budgeting – I saw how life-changing that could be.”
Name of firm: D&M Financial Services
Name of licensee: self-licensed
Time in the industry: 17 years; own AFSL since April 2017
Academic qualifications: diploma of financial planning; advanced diploma of financial planning
Accreditations: Certified Financial Planner; SMSF Specialist Adviser
Professional association memberships: FPA, Self-managed Super Fund Association of Australia
