In a world where businesses need to allocate resources towards growth strategies though marketing and advertising, Grove Securities has achieved more than two decades of organic growth in its business.
With a presence in two Western Australian cities – Perth and Albany – Grove managing director Mark Grist describes the business as being “fairly conservative” and has found success relying on referral partners.
“We like to ensure we don’t take any risks with the business, we’re in an industry that’s probably risky enough,” Grist tells Professional Planner.
“We make sure our business is rock solid. We’ve just gradually grown the business. We’ve done very few marketing campaigns. We rarely advertise. We typically just get as much business as we can handle through client referrals.”
Grist says the practice has a diverse client base, due to a combination of service a large capital and a smaller country town, and there is a preference not to alienate referral channels or existing clients by knocking back people who have been recommended to engage the practice.
“I know that’s probably not in many people’s eyes the most business-savvy approach,” Grist says.
“However, we find that quite often those clients that we do look after that perhaps initially have not been profitable…when you get that strength of relationship, inevitably, things change over time and other referrals come in. We do prefer to definitely focus on clients that are after long-term relationships.”
Having said that, Grist says complex retirement needs and SMSF administration are key value propositions for the firm.
“We generally prefer that more complex end of advice because these days with technology, a lot of people can go out and basically do their own thing in terms of investing if they wish to,” Grist says.
Grove Securities was originally started by Grist’s father Richard in 1999 in Albany. “I had been in a totally different industry,” Grist says.
“My background was not financial services at all, but I was looking to essentially work for myself. My father was looking to retire, so it was a good opportunity.”
The junior Grist moved into the business after his father started the practice.
“There was another business he had prior to that which meant that the new business in 1999 was up and running with a decent client base pretty early on,” Grist says.
Mark was living in Perth, while Richard covered Albany, which had little appeal to his successor.
“I didn’t want to move down to Albany so we looked to recruit some good long-term people down there,” Grist says.
“We did that by recruiting Penny [Slebos] who’s still currently a director and shareholder and the primary adviser down in Albany, but with me living in Perth I also wanted to get a client base established and the business up and running. That helped in terms of the diversification of the business.”
The practice has around 350 clients and $280 million funds under advice, with three advisers in the Perth office and two in Albany.
After losing an adviser recently, Grist says it’s been a challenge to replace them because the style the business requires its advisers to cover more of the administrative load.
“There’s been three candidates that I’ve either offered or thought about offering the role to and every one of those three have said they’re not really interested once they know more about the job because they don’t want to be involved in any administration, they just want to be client facing,” Grist says.
“We like to do everything ourselves. We do have support staff, we typically have about… 13 staff all up, so we do have a reasonable level of support in delivering the advice.”
The firm has preferred going the self-licensed route, believing it gives them the ability to have a holistic view of every facet of advice business processes.
“It gives us more control and we do find there are a lot of occasions where being in control of everything ourselves enables us to then better control the client service and client outcomes that we can deliver,” Grist says.
“It’s got lots of benefits in terms of your business. It’s not only remaining in control of your destiny, it’s also being forced to really understand the regulatory environment and to understand the risks and the implications of what we do on a day-to-day basis operationally.
“We know that if anything goes wrong, we’re wearing the whole thing, so we need to know what’s going on.”
But while the business owners prefer being in the driver’s seat, Grist also agreed with the recent findings of the Australian Law Reform Commission report which described financial services law as ‘porridge’.
“I totally agree with that and for that reason, we have in recent years, decided to get more support,” Grist says.