Partners Wealth Group co-founder, managing director and principal adviser Mathew Cassidy says he remembers well what prompted him to start a financial planning firm. After travelling the world he returned to Australia in 2001 and saw a market he describes as “pretty unsophisticated”.
Most advisers were coming out of insurance and relied upon product recommendation for profit, he recalls, with little thought to strategy around wealth.
“So we looked at the market and where most people accessed advice, which was through accounting,” he says. “And we thought, how do we have a different model where advice and strategy come before product, while working with accounting firms so we’d be front and centre?”
Cassidy says PWG was one of the first firms to really lean into the advice and accounting referral relationship, which has led to significant growth at the business – even during the current industry malaise. From a standing start the group now has 90 staff with 20 authorised representatives and a slew of partnerships with accounting firms across the country.
“We started with $90,000 of revenue in 2003 and now we’re up around 24 or 25 million,” he says, adding that total client FUM for the group is at $1.85 billion.
Cassidy was also bumped up to number seven on this year’s Barron’s Top100 advisers list after being pegged at number eight in 2020.
Interestingly, while Cassidy has a minimum account size of $500,000 no other adviser in the top ten has a minimum account balance of less than $2,000,000, with some starting at $5,000,000.
Friends like these
The adviser says the integration between advice and accounting is a primary driver for the business’s growth.
“We like to treat accountants as friends,” he tells Professional Planner. “The reason it works well is accounting is generally backward looking, they assess tax business performance and then they bill the client. When people in a strong financial position then ask what to do the accountant can’t help with that, they need financial advisers. But the advisers doesn’t know how the client operates fully unless they have a good relationship with the accountant.”
Cassidy says PWG has three different models at their disposal; joint ventures, referrals and partnership programs.
“The most complex is the JV one where we help them run wealth,” he explains. “The referral model is for when they don’t have the right scale, and the partnership program is for when we work alongside them with technical support.”
The only downside to the flow of referrals from PWG’s accountant ‘friends’ is keeping up with the kind of growth required to meet demand, Cassidy says, To that end, the group has formed what he calls an “assistant adviser academy”, which puts university graduates through a two-year program that not only includes FASEA’s professional year, but teaches more of the things aspirants need to start advising at a proficient level.
“You might come out of university and have a qualification but you only know the 10 to 12 basic financial planning strategies,” he says. “Having an on-the-job two year program advances that skillset.”
While he agrees with some of the efforts the government has made to introduce education and ethics standards, Cassidy believes the current regulatory regime is stifling the industry.
“I think it’s been complete overkill. We needed the Hayne royal commission without doubt, some of the practices were unacceptable and any time you put yourself ahead of the client it needs to be stamped out,” he says.
“The problem is that it’s gone overboard, the cost of providing advice has gone up 30 or 40 per cent,” Cassidy continues. “No client is expected to accept a 30 to 40 per cent fee increase, yet businesses have to bear the cost.”
The pressure on advice is part of the reason staff are so hard to find, he says, predicting that eventual adviser numbers could go under 10,000 in 2026, when FASEA’s final education mandate comes in, before recovering. “I think it’ll get worse before it gets better,” he says.
Yet Cassidy has high hopes for the industry, and acknowledges that the adviser exodus has put stable advice firms in a great position to take advantage of the current imbalance between demand and supply.
He also believes the government has the best intentions, with the incoming single disciplinary body an example of a policy line that advisers may not be sure about, but have to give the benefit of the doubt.
“The government’s trying to take the right course of action,” he says. “I think with that you’ve got to show some trust that they’ve got the best heart of the industry in mind.”