?
Take
Quiz

Check how does your business rate

Take the Quiz
Call Us

Our response to the Banking Royal Commission

Given the shocking details that have been aired recently as a result of the Banking Royal Commission, we felt compelled to provide a response on how The Practice’s financial planning offering stacks up compared to the stories of poor advice and service coming out of the larger institutions.

How is The Practice’s Financial Planning offering different to those portrayed in the Royal Commission?

I’m proud to say that The Practice Wealth Management advice and service offering is significantly different in a number of very important ways. We started the journey 10 years ago to build a market-leading, client-focused financial planning offering, and we are always looking to improve what we do so we can add as much value to clients and ensure they have a great experience.

Briefly, we’re different to the majority of advice firms in the following ways:

  • We are strategy focused and provide holistic financial advice to our clients on their overall situation. Many firms only provide super, investment or insurance advice in isolation and they call that financial planning. We do all these things, but it’s only part of a client’s overall financial planning advice. Most clients are looking for direction around how to best improve their situation and build wealth for the future, which is our ultimate focus with any advice we provide.
  • In regard to superannuation & investment advice we are a Fee for Service firm which means we get paid from our clients for advice & service provided (which is all agreed in advance so there are no surprises) and don’t get paid by any investments or platforms for placing business with them. (Note: in Wealth Management, risk insurance is the only area of advice where we get paid via providers as no clients are willing to pay a fee for all the work that goes into providing, implementing & reviewing risk insurance advice).
  • We have our own Australian Financial Services Licence (AFSL) which means we have no alliances to any institutions and when it comes to superannuation, investments & insurance advice we are completely objective and free to recommend whatever is most suitable for our clients.
  • We are focused on building strong ongoing client relationships, serving our client’s needs and providing value-added service to our existing clients as their situation evolves. We contact all of our Wealth Management ongoing service package clients (over 300 in total) on a yearly or half-yearly basis (depending upon their agreed service package) and invite them in for face-to-face strategy review meeting (many others prefer skype or a phone call). We review their up to date situation and discuss their strategy for the year ahead, to adapt to their changing needs and life circumstances. Our biggest source of new clients is via referrals from existing happy clients. While this is something we are proud of, we are always looking to improve our ongoing service and be of more value to existing clients.

Investment philosophy & portfolio management

In addition to the above approach, The Practice Wealth Management manages approx $100m for around 300 clients (mostly inside Superannuation) and it’s something we take very seriously. Our investment philosophy is ensuring clients are invested in high quality investments suitable to their risk tolerance and investment times frames, while keeping costs low and maintaining broad diversification. We are always looking to find ways to reduce costs for our clients while maintaining this investment philosophy.

Additionally, as we have our own Australian Financial Services Licence we have the flexibility to recommend whatever superannuation (or investment) structure that is suitable to clients individual goals & circumstances – whether that be via Industry Funds, Wholesale Funds, or Self Managed Super Funds. For clients with relatively higher account balances, Wholesale Super/Investment platforms we use with tiered administration fees structures can be very cost effective, as the higher the account balance, the cheaper they become.

As an example, we recommended this superannuation structure in a financial strategy we presented recently to new clients who have around $500,000 each invested in a well known superannuation platform via another adviser. Our recommendations were going to save them over $8,000 per year in investment & administration fees alone. That’s $8,000 per year direct benefit to their super funds, that is then left to grow and compound over time and grow to an even larger dollar benefit in the years ahead. Needless to say they were very happy. (They were also referred to us by other happy clients).

Combined with our mix of low cost and broadly diversified investment funds we recommend in client portfolios, this way of running clients’ superannuation & investment portfolios can provide a huge benefit to new and existing clients. Whilst this approach can be beneficial for clients with more than $100,000 in superannuation, for clients with over $250,000 super account balances the fee savings is dramatic, and the higher the account balance the more compelling it becomes.

Finally, we are always looking for feedback from existing clients on ways we can improve our ongoing service and be of more value and benefit to you. Please let us know if you have any constructive feedback, to enable us to serve you better.

If you have any questions, please feel free to email me direct or call (03) 8888 4000 to arrange a time to discuss further.

 

Matt Morrison

Director, The Practice Wealth Management