Yes, independents can make money

Johanna Roberts

By

July 19, 2018

Keith Henderson is only a few months into starting his Malibu Wealth Advisory practice on the Sunshine Coast, but already he has a firm idea of what kind of small business he wants to run.

For starters, he has no plans to scale up, hire full-time staff or sell the practice when it’s booming in seven to 10 years.

“I want to keep it as just me in the business,” Henderson says. “There is a sweet spot of between 60 and 80 clients that I want to get to in the next two years and if I gather any more than that, I would have to put people on…The low-overhead model suits me because I have no interest in scaling up and selling the business. I love what I do and where I live, so I see myself as a practitioner who wants to work in their own business, rather than a business owner who is hoping to grow it.”

While Henderson admits he may think small in terms of his business model, he points out he’s quite exacting as to how he conducts business.

Malibu accepts no commissions or kickbacks, including trailing commissions, Henderson says.

“It’s really important to me that I am offering my clients independent advice, and after the Hayne royal commission, it’s increasingly important to them, too,” he says. “I can sit in front of clients and recommend an insurance product because they need it, not because it benefits me, and that is a big difference.”

Some advisers claim that a certain level of commission on insurance products is necessary, but Henderson rejects that contention.

“It is possible to offer good advice while accepting commissions on insurance, but it’s just a lot easier to offer good advice if you don’t,” says Henderson, who is also a member of the Independent Financial Advisers Association of Australia.

Is it possible to make money and be thoroughly independent?

“Yes, I think it is, but it takes a while,” he says. “You need to go into the business with some capital behind you so you have time to build up your client base.”

Henderson has set aside money for the next 18 months, and expects to break even in his first year.

Before starting Malibu Wealth Advisory, Henderson worked for BT Financial Group in what he describes as a kind of “mature-age apprenticeship”.

“I learned a lot about the business side of things, and I really got a lot of inspiration working with small business owners, who tend to have a kind of spark about them,” he says. “It made me want to run my own show.”

Before becoming an adviser, Henderson worked as a teacher, both in Australia and overseas, and even spent some time in his late teens in the defence force.

“I learned about the importance of co-operating with others to get things done, to get ahead,” he says regarding his defence force experience

Co-operation is a skill Henderson says came in handy many times in subsequent years and especially when it came to starting his own shop.

“I am providing comprehensive advice to clients that includes modelling and investments, so this work takes time,” he says. “But as you’re doing this, you’re building up that client base and becoming known as a trusted figure in the industry, which is so important to clients.”

Henderson is also a fan of high barriers to entry, including obligatory education requirements.

“If you want to be treated like a professional, then you need to be educated like a professional,” he says. “It’s reasonable for clients to expect that we have been educated in this field, and while I agree that there may be some devil in the detail of the new education requirements, the principle is one I believe in.”

 

Name of firm: Malibu Wealth Advisory

Name of licensee: Independent Financial Advisers Australia
Time in the industry: 5.5 years; 4.5 of those as an authorised representative (financial adviser), and one year of other industry experience (BT financial group, Sydney)

Previous jobs: Small business shareholder/employee in venture-capital business in Melbourne; teacher; instructor at the Department of Defence; advanced asset management, superannuation (marketing and direct) for BT Financial Group; and adviser for BT Financial Group in retail and small business advice

Academic qualifications: master’s degree in financial planning (with distinction); master’s of teaching English to speakers of other languages; graduate certificate of professional writing; bachelor of arts degree

Accreditations: SMSF Association Specialist Advisor; Financial Planner, AFP

Professional association memberships: FPA, IFAAA, SMSFA

 


TOPICS:   Malibu Wealth Advisory

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