When Rob Davy retired after 27 years with Outlook Financial Planning, many spent as its general manager, the only thing on his mind was a well earned break.
But then he got a call. Webb & Co, an accounting firm with 50 staff and some 1500 clients, was looking to do what many accounting groups have done in recent times: make a move into financial planning.
Davy, who through Outlook provided financial planning services to customers of the Members Australia Credit Union — a credit union for workers in the transport and energy industries in Victoria — was considered the man for the job.
Webb & Co launched its dedicated financial planning arm — Webb Financial Services — last September, with Davy at the helm.
“Over the years [Webb & Co] has been just outsourcing its financial planning requirements. But it could see that it was better for it to now be brought in-house. Particularly nowadays with the requirements [under the FSRA] for accountants not to give that “incidental financial advice”, they felt it was timely to bring financial planning in-house to be able to offer their clients an all-round service with tax accounting and financial planning,” Davy says.
But first there were some decisions to be made, not least of which was whether the new financial planning business would operate under its own dealer’s licence.
In the end, the onerous licensing requirements proved too big an obstacle, for now at least.
“The first thing the partners [of Webb & Co] had to decide was whether they’d go ahead and get their own dealer’s licence. They decided not to go down that track,” Davy says.
“I guess the complexity of legislative requirements today was really a stumbling block for them. They could also see that if the business did grow quite strongly, they could transition across to their own dealer’s licence in due course.”
Instead, the group asked a number of dealer groups to tender for its business, eventually choosing to join Sealcorp’s Securitor. The move will also see Webb Financial Services adopt Sealcorp’s Asgard master trust as its primary administrative platform.
With the new group’s structure confirmed, Davy is now turning his attention to staffing.
At the moment, Davy is the group’s only financial planner, although he expects to be joined by four or five others within two years.
And they will have their work cut out for them. Davy is already trawling through the database of Webb & Co’s accounting clients looking for opportunities, with some early success.
The accounting business has some 200 clients who run self managed superannuation funds, many of whom, according to Davy, are strong candidates for financial planning advice.
“I have noticed with the asset allocation of these clients that many are heavily concentrated into direct Australian equities. Quite obviously, I will be spending time running seminars to encourage these people to review their investment strategies in their self managed super funds and look at the need for greater diversification. In many cases, their investment strategy is not appropriate, going forward,” Davy says.
Davy also plans to run monthly seminars on other topics, such as retirement planning and wealth creation, to Webb & Co’s accounting clients.
The strategy is part of a plan to “get in front of the clients”, a policy Davy describes as key to the success of Webb Financial Services.
However, Davy’s ambitions for the financial planning business stretch beyond just Webb & Co’s client base.
While referrals from Webb & Co’s accountants will always be the lifeblood of Webb Financial Services, Davy also aims to ultimately promote the financial planning business independently of the group’s accounting base.
Such a move could eventually result in a situation where Webb Financial Services, in a complete role reversal, would refer clients on to Webb & Co’s accounting service.
“Once I have worked through the database of Webb & Co I would see the group moving outside of that into the general community. Then we will have a degree of cross referrals here from the financial planning side to the accounting side,” Davy says.
While such aspirations are some time off, Davy says they are just an indication of the synergies that can arise when accounting groups move into financial planning, and vice versa.
For the time being, however, Davy is content for Webb Financial Services to trade off the name already built by Webb & Co.
“I think there is a trust relationship between accountants and their clients. Hopefully I can run off that, and the trust can flow through to myself as well,” Davy says.
“It is a logical step for accountants to become involved in financial planning because they have the first hurdle overcome and that is the hurdle of trust.”
