Andrew Coloretti

Boutique dealer group Spark Financial Group will focus on improving financial literacy among young Australians after shifting to a profit-for-purpose business model earlier this month, which will see it donating 100 per cent of its profits to nominated charities.

“[Financial literacy] will obviously empower [young people] and obviously lead to financial independency [and] also provide choices,” Spark chief investment officer and director Andrew Coloretti tells Professional Planner.

Spark announced last month that it will launch a ‘Legacy’ program this financial year. It will provide easy-to-understand products and services, as well as tools and resources to facilitate understanding and decision-making.

Additionally, Spark has sponsored non-profit organisation Financial Basics Foundation, which provides the basics of effective financial management to Australians between 12 and 24.

“While that’s our first sponsorship, it goes to the heart of what we’re trying to do,” Coloretti says.

Youth financial literacy in Australia has continued to deteriorate in recent times. Ecstra Foundation CEO Caroline Stewart told Professional Planner in June that this is “really concerning, as students are transitioning through to either further study or the workforce”.

Stewart believes students in Years 9 and 10 would significantly benefit from Ecstra’s Talk Money program because they are “thinking about purchases independently of their parents and making decisions about their finances”.

Embracing charity

Coloretti explains that Spark’s decision to transition to a profit-for-purpose model was “really natural”.

“We are committed to donating our profits to charitable outcomes,” he says.

He adds that Spark has “a bit of a nursery psychology or mindset” around trying new things while simultaneously understanding and learning from the market.

“[We want to ensure we are] getting the right pace, the right temperature, getting it measured through the right medium. Critically, it’s about authenticity, colour, and connectivity.”

Coloretti claims there is no downside to being a profit-for-purpose organisation. “From a business point of view, I think it’s altruistically positive,” he says.

“From an organisational point of view, all our profits are going to the right people and the right causes, and not in the pockets of the shareholders. That’s just the opportunity cost to shareholders.”

Coloretti says Spark has implemented checks and balances to maintain a balanced system, ensuring that it retains and appropriately rewards its advisers.

“Moreover, we believe in inclusivity, making it open for advisers and clients to also participate in making contributions,” he adds.

Skyrocketing costs stifle newcomers

Providing financial advice has never been more expensive than it is right now, and the cost of operating a financial advice firm is a barrier for new entrants, according to Coloretti.

“If you’re a single advice type business or even you have a couple, it’s not cheap,” he says.

“The whole infrastructure is not cheap. Often when you’re a sole practitioner or part of a small team, you don’t have economies of scale. You need to have all those skills in place because doing business in the financial industry 20 to 30 years ago is far different from it is now.”

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