Todd Kardash was genuinely surprised – gobsmacked, in his own words – when Matrix Planning Solutions was named the 2017 Licensee of the Year at the Professional Planner Licensee Summit on Monday.
Matrix also picked up the award for Institutionally Affiliated Licensee of the Year. The awards, based on detailed research by CoreData, come just two-and-a-half years after listed financial services company ClearView Wealth acquired Matrix in a $20 million deal, and set about integrating the businesses both commercially and culturally with its own financial advice subsidiary, ClearView Financial Advice.
Kardash attributes the success of the acquisition, as evidenced in the Licensee of the Year award, to paying particular attention to the culture of the target company.
“When you look at the purchase of any dealer group – and there have been hundreds of them over the last 20 years – many of them haven’t worked that well,” he says. “You see [adviser] breakaways, and dissatisfaction and culturally they can never get aligned.
“When we bought Matrix, we were very aware that, yes, we had two of everything – Xplan installations, compliance systems [and so on] – but more importantly, you have got two cultures. We were bringing a new culture into our culture.
“[ClearView Wealth managing director] Simon Swanson and I were very deliberate that they had to get where we were coming from, because if they didn’t get where we were coming from and what our core values are, we’d go the same way that everyone else had gone.”
Kardash says it helped that the two businesses were reasonably well known to each other prior to the transaction, but even so, there were sensitivities that needed to be respected. Once cultural issues were dealt with, the transaction worked commercially because Matrix had a strong brand, and ClearView liked and respected Matrix’s key advice businesses. It also knew and liked the staff of the dealer group itself.
Kardash says ClearView gave itself 12 months to compete the Matrix integration. Perhaps counterintuitively, some problems experienced with integrating the Xplan installations gave Matrix advisers some insights into the culture of their new home.
“It’s fair to say we blew up the Xplan integration in the first six months,” he says. “We got off to a very bad start. We probably had the wrong people on the ClearView side, and they had the right people on their side. It probably took us six months before we recognised that and fixed it.
“But in some respects you become closer when you have been through something like that…how you resolve it is the key.”
Matrix remains the smaller of the two advice businesses, with about 90 advisers to Clearview Financial Advice’s 150-plus, but Kardash says its size belies its significance.
Whereas ClearView advisers were focused closely on risk, Matrix brought a focus on wealth management, and a balance to ClearView Wealth’s overall business.
Kardash says that with the integration bedded down and working well, ClearView Wealth’s objective is to use technology to help its advisers deliver better advice and better services. He says advisers have experienced a marked increase in compliance costs over the last three to four years and, “We always want to try to drive further efficiencies.”
“I do think that we’re all effectively going to become technology companies, who happen to be in financial services,” he says. “Particularly in our industry, if you can’t use technology to create greater efficiency, you’re going to struggle to keep advisers. One of the greatest things a dealer group can do is provide its advisers with better technology…to make it more efficient to produce documentation.”
