Charter Financial Planning is taking an increasingly tough stance on the qualifications of its financial planners. But as John Wilkinson discovered, it is offering full dealer services to the right candidates with the right attitude.
Charter Financial Services could almost be described as a co-operative, despite its ownership by the global financial services giant AXA. The dealership has adviser focus groups that look at the direction the organisation is heading.
Charter national manager Bruce Birchall says the philosophy behind Charter is to work in partnership with the advisers.
“Part of this philosophy involves the Charter focus groups which look at the direction of the dealership in relation to the service provided, approved products and how the group is promoted,” he says.
“The advisers want to see standards established and applied to advisers joining the dealership in the future.”
A requirement of these standards is that all advisers will need to be CFPs or have the ability to achieve this level of education.
“It is about helping the adviser to develop their practice, as all are self-employed people,” Birchall says.
The independence of Charter advisers also extends to branding, as most only have AXA as a sub-brand.
The establishment of Charter as a stand-alone brand is surprising, as the dealer group was formed only in 1996. It now has 300 advisers and continues to expand, Birchall says.
It has been a group that has a strong presence in the small-to-medium sized corporate superannuation market, although, like all advisers, a Charter adviser will deal with all aspects of financial planning.
“In the mid-nineties, there was a group of advisers who were looking for a brand to take to the market that would encompass the SME corporate market, together with self-funded retirees,” Birchall says.
“The focus of these advisers was more towards investment planning across the board with a lot of corporate diversity.”
The client target group for Charter is medium to high-net worth individuals, as well as the SME corporate superannuation business and self-funded retirees.
As a move to maintain standards, there is an eligibility criteria that advisers wishing to join the dealership must meet.
“Advisers must be committed to providing advice in the areas of risk, superannuation and investment,” says Birchall.
“There is a strong commitment of fee-for-advice and advisers must use the dealer software, as well as be committed to the ongoing development of both themselves and their practices.”
The adviser is expected to work in the business or be able to carry some of the functions of the practice, Birchall adds.
While there is an emphasis on qualified advisers joining the dealership, those in the process of becoming qualified would not necessarily be ruled out, subject to them meeting some of the other eligibility factors.
“If there was someone in the second year of their education and they were working towards CFP standards, they could join the group,” Birchall says.
“We would expect them to be in a successful business, with new opportunities coming along.”
This growth of an adviser’s practice would be achieved with the use of Charter’s resources, he says.
“The key strength of Charter is the resources we put into practices at state level to help each practice develop,” Birchall says.
The resources offered include a practice development manager who helps advisers with areas like training. All training is accredited through Deakin University in Victoria. There are also technology support people at state level and technical staff to deal with product and legislation issues. Charter also offers a paraplanning service at state level.
“We offer a full service dealership that includes a dealership practice manager to help advisers with the business side of the practice,” Birchall says.
This manager helps with succession planning and day-to-day business practices such as client segregation.
Succession planning tends to see the advisers’ practice either being taken over by someone within Charter’s network or sold to an adviser wanting to run their own business.
Birchall says AXA will only buy the practice as a last resort and will then on-sell the business at a later date when a suitable purchaser is found.
“We are a facilitator in succession planning for advisers and usually we find buyers from within the group,” he says.
Pricing of an adviser group is normally three to three and a half times the re-occurring income, Birchall says.
Compliance is handled at state level, although the team undertaking inspections is based at AXA’s head office in Melbourne.
Advisers are audited for compliance once a year. If there were problems, Birchall says, then there would be more frequent audits backed up with training, if it was appropriate.
Plans over a certain size are automatically audited as well, he adds.
Compliance and training are integral parts of the advisers business, Birchall says, and Charter provides a number of opportunities for advisers to meet their professional development requirements.
There are normally three national professional development events a year. These consist of single professional development days, together with a state conference, which lasts a day and a half.
The third national event is the main conference, lasting three days, and is designed to provide technical advice as part of the adviser’s professional development.
Birchall describes Charter as “a quiet achiever”. Within five years it has achieved a place in the top 10 largest dealer groups, as listed in theMoney Management Top 100 Dealer Group survey.
Expansion is on the cards and Charter is always looking for more advisers to join the group. However, it will not be surrendering its co-operative way of running the dealer group.
