As it exits advice, incoming BT Financial Group chief executive Matt Rady sees the firm’s position in the market as an “enabler” of advice, not a provider.
The firm understands its role is no longer in giving advice; its collegiate adviser group – Kon Costas’ Principals Community – went solo late last year which followed the sale of Securitor and Magnitude Group to Veridian Advisory in 2019.
“We’re not an adviser, that’s a business that we exited and there are opportunities with investments and platforms,” Rady tells Professional Planner.
“Where the conflict arises is when you’re the person in the middle that’s making the recommendation of where to invest and that is something we do not do.
“Advice is really important for Australian retirees and we see our business basically enabling advice for as many people as possible and [to] be in the business of making that advice more efficient.”
But Rady says the advice industry, notwithstanding its challenges, is more settled than it has been over the course of the last few years.
“There’s a real focus back on clients and for BT, the purpose and what we’re trying to do is bring some real unrelenting focus back on our customers,” Rady says.
“Over the course of the last few years we’ve just been distracted by the myriad changes that’s been going on, so it’s about simplifying the business and bringing it back to its root purpose.”
When it comes to how the relationship with advisers will now work, Rady says the strategy is around “doing the little things well”.
“Sometimes you can get caught, with being a big provider, with being trying to do too much for too many people,” Rady said.
“What we’re trying to do is focus on the things that are most important to advisers and delivering those services as well as we possibly can.”
This meant “going back to our roots” with a focus Rady says will be important in the short term.
“We’ve had to make some tough decisions around some of the services that we’ve provided to advisers recognising that it’s been a little distracting,” Rady says.
“What we’re doing now is focusing on the things that are most important to them and looking to leverage those to enable services to advisers that they want over time.”
Rady for the job
With over 30 years in the financial services industry, Rady was most recently chief executive for retirement product-focused Allianz Retire Plus, but it was experience with Macquarie Wrap and Iress which led him into the new role.
“My first real job of real significance was building Macquarie Wrap and I spent seven years in the foundation of building Macquarie Wrap and superannuation business,” Rady says.
“Then subsequently building out a range of investment businesses within Macquarie and then finally into managing some advice businesses offshore for them.
“If you look back at that, the core of my entire career has really been embedded in that portfolio that is currently BT.”
When it comes setting culture, Rady has only one word: focus.
“The whole industry over the course of the last couple of years has gone through a period of what I would call ‘distraction’,” Rady says.
“Post-Royal Commission advisers having been thinking about what the right model for them is.
“Banks have been thinking about what the right model for them is and pretty much every financial services provider has been in a position where there’s been a high degree of introspection and I feel that we’re through that.”
No Panorama drama
Despite other acquisitions in the investment platform space, including Praemium acquiring Powerwrap and Iress acquiring OneVue, it is unlikely BT will join any race as the firm sees the logistics behind an acquisition as not the best way to increase market share.
“You can say you’re big but you end up running three platforms and the work you have to do is quite internal, which frankly BT has had to do over the last couple of years with the consolidation of BT Wrap onto Panorama,” Rady says.
“[That] effectively enables economies of scale because you’re running one single operating unit and one of the challenges with acquisition is as soon as you acquire another platform you can say your market share is big but the reality is you’re really two things under one hat.”
He expects some of the competition will be challenged by the process of consolidation and how it ultimately creates a distraction.
“The advantage BT has is a lot of that work done is behind us, whereas for some of our competitors that work is in front of them,” Rady says.