In the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry’s focus on the financial advice sector, many advisers are rightly wondering how to differentiate themselves from the pack and stand out as the bearers of quality.
Paul Nicol, senior partner at GFM Wealth Advisory, says eschewing a cookie-cutter approach to products and advice is absolutely fundamental.
“We are completely off-platform, which means our advice is entirely bespoke,” Nicol says. “But I think some advisers take that cookie-cutter approach and offer template solutions to individual clients.
“I’m sympathetic as to why this is happening, as I understand there is a big compliance burden for quite small firms that really do need the support of the dealer group.”
He argues, however, that bespoke advice, while time consuming and administratively taxing, has an appeal that cannot be overstated.
“Our clients first walk through the door because we’re not institutionally aligned and we offer a fee-for-service model,” Nicol says. “But what ends up really appealing to them, a real point of difference, is that there is no template we use; every client’s portfolio is individually structured.”
In many ways, Melbourne-based GFM Wealth represents the new breed of financial adviser.
All five GFM advisers are self-managed superannuation fund specialists and tertiary educated, and the company has brought in two accountancy practices to expand its services. The business has almost 30 staff and $750 million in funds under management.
“The average age of the advice team is 40, but the average tenure with the firm is more than 10 years,” Nicol says.
Most recently, Nicol was ranked 27th in the 2018 Top 50 Advisers in Australia by The Australian newspaper and Barron’s yearly list, and came ninth in last year’s inaugural rankings.
The stories that emerged about unethical advisers during the royal commission were galling to him, but not necessarily a bad thing for the industry in the long run.
“The industry did need a shake-up because, while there was plenty of awareness of the need for financial advice, there was less awareness of what constituted quality advice,” he says. “We have actually found [since the start of the royal commission] an increase in clients approaching us, because they’re now actively seeking out quality advice.
“So, in that sense, it’s been good for us.”
There has also been much talk recently of the phased ending of trailing commissions still being paid under grandfathering arrangements, but Nicol cautioned against a black-and-white approach.
“There must be a sensible approach to the ending of these trailing commissions,” he says. “It doesn’t necessarily make someone a bad adviser if they’re receiving them, especially if their client understands the payment and why it is being received.
“Having said that, I think there is a big inevitability to ending these commissions, but it just needs to be phased out slowly, otherwise a fair few businesses may go to the wall.
“You’ve got to give people time to re-position themselves.”
And a business, of course, is only as successful as its advisers. It’s part of the reason 40 per cent of GFM Wealth’s advice staff are women. Another key trait for staff is endurance because, Nicol says, clients can detect a flake a mile off.
“You need to possess a willingness to enter into a long-term relationship of trust,” he says. “Clients like to know that you’re in it for the long haul.”
Name of firm: GFM Wealth Advisory
Name of licensee: Self-licensed
Time in the industry: 19 years
Academic qualifications: Bachelor of business (RMIT); advanced diploma of financial planning; SMSF Specialist Advisor
Accreditations: Affiliate member of the Financial Planning Association
Professional association memberships: FPA, SMSF Association
Other memberships: Australia’s Top 50 Financial Advisers List in 2017 and 2018
TOPICS: GFM Wealth, Paul Nicol, royal commission into banking and financial services