More than just portfolio managers

15 May 2020

As a part of its new series, Money Management speaks to financial planning groups and asks them to share their views on the industry in a new environment. This month, MM interviewed John Woodley, chair and executive director of Fitzpatricks Private Wealth.

MM: How is the current situation affecting financial planners?

Our advisers do not really position themselves just as portfolio managers and that is probably a difference because our focus is really on helping people get organised. Our advisers are actually quite relaxed at the moment because we have low client numbers to advisers. The advisers are focusing on calling their clients to see whether they are OK and reminding them of the strategies they have in place. Right now, that value of an adviser, is to build personal relationships and personal advice to the client is gold. 

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People need to feel safe and they need to know what their options are. At this particular time, surrounding clients with good advice is a really important function. Everyone is affected but our advice clients are probably more prepared than others. There are still things that you cannot prepare for but having a conversation and having somebody there who can help really matters. 

Right now the advice industry has a great opportunity to just deliver that community function – not to talk about it, not to focus on what the advice might be in the future or what the implications of the Royal Commission are but to actually, right now, deliver this community function. And I see that happening repetitively and that really excites me.

MM: How do you think the business model across the industry will evolve and which ones will struggle?

We are going to need a lot of people working together – because we really do believe in the value of advice delivered appropriately into different areas and obviously it will be delivered at different price points for different areas so there is a value in the pricing as well.

If the advice community was doing strongly we would have a healthier community – if you had a whole body of people out there who are confident about their financial future, knowing what they can do and empowered by the decisions they can make, I believe that would actually produce a healthier community but for a long time we have not been doing that.

As a whole [the industry] has not been delivering it in the best way we possibly could have and in the future I think you are going to have enough people wanting to do that, but as the advice community, we need to take a bigger view. But our view should be that a large majority of people can access good and appropriate advice or information that actually allows them to make good financial decisions.

We also have this massive transition of wealth happening – from the baby boomers to the next generation – and that is not straightforward for high net wealth clients. And that’s where you really need holistic personal advice, not just investment or product advice, it needs to be the true value of helping people make their choices through multi-generational advice. 

I think we are going to see different models pop up in different areas but the goal should be not just around businesses being able to prosper but that people could actually benefit from that community function that advisers bring.

MM: What are the strengths of your business?

We do not really see ourselves as a licensee but we see a license as a function of advice business. There are business models out there that are really just providing licensing services whereas our advisers have joined Fitzpatricks for the way we give advice and they are subscribed to a very consistent advice model and style of the business.

That is the way we developed 20 years ago so when there were legislation changes then we adapted to those and they did not really impact our business model. We have always had a fee basis model where we are not getting commission but rather, we are paid for helping clients get organised and achieving their goals.

That is where we started and we want to help clients get organised and have a healthy space to talk about their goals, not just specifically about their investments. 

Where we have come from and the way we are structured is a point of difference for us and why advisers have joined us rather than some other groups. Most licensees are advisers running their own business and they just want a licensee support whereas our advisers have joined Fitzpatricks because they love the way we give advice. 

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