One of the biggest lessons in running a practice for Merideon Wealth Strategies’ managing director Mark Rattigan has been understanding the value of the advice they were providing to clients to ensure they were charging appropriate fees.
“Over the years we worked out we were undercharging and overdelivering,” Rattigan tells Professional Planner.
“We took on an acquisition and saw how much other businesses were actually charging and what they were providing for that money and realised we were offering so much more and charging much less.”
Rattigan concedes they were often giving away part of their services for free and identifying what they should be charging was a significant adjustment for the business.
And more importantly, being able to show that value to clients who had been getting charged too little along the way to help with the repricing conversation.
“The most important person you have to convince is yourself, the adviser has to believe the value is there, the clients usually see it,” Rattigan says.
“Most clients were quite comfortable, we actually found we received more referrals. Those people whose price we were increasing started referring more people.”
The firm went through and repriced lower-end clients initially to make sure they were financially viable to serve, as well as ceasing the ongoing relationship with ones they couldn’t add value for based on the cost – or putting them on ad hoc services.
The firm then started using their new value conversation and tools to ensure higher value and more complex clients were also paying the appropriate fees for the service.
Learning from a crisis
Merideon celebrated its 15th anniversary in August, but Rattigan started his financial career in stockbroking for several years before starting the advice practice.
It was after the Global Financial Crisis that he decided focusing on strategic financial advice was a better option.
“I started to realise that the investment side wasn’t my thing, and I really preferred dealing with the strategy and how advice impacted clients outside their investments,” Rattigan says.
“I had a client who lost their portfolio, had to sell down at the wrong time because they’d injured themselves and couldn’t work, so things like income protection [insurance] started to appear a lot more important to me.”
After leaving the stockbroking world, he set up his own business, having never worked in a financial advice business. “It was very much learn on the job,” Rattigan says.
“I opened the business, sharing an office with a friend of mine who was setting up a marketing business at the same time. We were licensed with AXA and started with their Discovery Start up program, so we had a small book of clients from a retired adviser – about $30,000 of revenue – and started building organically from there.”
He relied on resources from BDMs, programs from the Association of Financial Advisers, and his licensee to help learn about being an adviser and running an advice business.
“Having never seen how another financial planning business operates, I came in and asked what would I want as a client, and then benchmarked ourselves against what we learned from peers and our licensee” Rattigan says.
But after the practice got to a certain size, it plateaued. “We tried to move from a sole practitioner into a business with other advisers, that was a different learning to what we’ve done over that first five years,” Rattigan says.
“[We] had a period there where we went two steps forward, three steps back. We struggled to find the right advisers to fit with what we’re trying to do. Being regional, there wasn’t a lot of local advisers around that we could utilise.”
The firm currently operates out of the Western Australian town of Mandurah. “Our vision has been to expand in the southwest, but we’ve been so busy locally that we haven’t needed to do that,” Rattigan says.
“Now that we have capacity, we’re looking at some acquisitions further south. One of our team members is just finishing off his Professional Year who lives further south, so we’re looking at some acquisitions in that direction for him to be able to service in the coming years.”
Switching focus
Rattigan switched licensees to Infocus in 2018 and began utilising their information and services to learn more about building a business rather than just being a good advice practice.
“The last six years we’ve finally broken out of the plateau and had a strong growth trajectory and roughly doubled the business in that time,” Rattigan.
One of the key changes during that time was that they started working with business consultant Brad Fox who he met previously through his involvement in the AFA Gen Next committee.
Fox had put together a peer group of advice practices from around the country during the Covid-19 pandemic and the firm ended up putting him on retainer as a business coach.
“That’s basically seen our business increase 50 per cent in revenue and our profits have tripled over that time as well,” Rattigan says.
“It was a long time getting started but definitely over the last five years it has really fallen into place for us.”
While Rattigan acknowledges being regional has its limitations with qualified staff being difficult to find, he admits there are still upsides.
“The benefit of being regional over being in the centre of Sydney, is there is a lot less competition,” Rattigan says.
“There’s a lower pool of clients but less competition so it sort of evens out.”
Being regional, Rattigan says they struggled to work in a specific niche to gain operational efficiency. They have worked with a broad scope of clients that not only cover the local region, but also Perth, the eastern Australian states and even some clients in America.
“We look at advisers who just deal with just medical professionals or lawyers and see the efficiencies they gain…that type of business would be difficult being regional,” Rattigan says.
“We focus mainly on the local area, but we receive referrals to clients’ friends and family who may be located outside the region. We have developed a better picture of our ideal clients now but the hardest thing when you get started is taking on everyone because it’s hard to say no when you are trying to feed your family.”
