It’s literally ‘heads down’ time at Financial Planning Services (Australia) (FPSA).
The group went through a period of rapid growth in 2002 and 2003 following its launch as a national dealer group in 2001, earning a place on Money Management’s Fastest Growing Dealer Groups list earlier this year.
But now FPSA is focusing on servicing and developing the practices it currently has on board.
FPSA national business manager Darren Wise says the calibre of practices in the group means they don’t need their “hands held every day” or want a group to be a “dictator”.
“Our main driving force is to allow the financial planners to run their businesses without the institutional approach. We give a fair bit of autonomy to the businesses, and we allow a considerable amount of input from the advisers as to how the business moves forward.”
FPSA has a target market of high-net-worth clients, and to capture these, they look for high-net-worth planners with established practices and significant turnover. Therefore, recruitment can take a little longer, and it is definitely a two-way street.
“We’ve had planners approach us that we weren’t suited to, they may have been suited to an institutionally-owned group,” Wise says.
Part of the reason for this is that FPSA charges a flat fee for its members, rather than using a commission-splitting arrangement. And while, according to Wise, being part of FPSA isn’t cheap, for high-net-worth planners it is quite cost effective, and allows the group to keep the focus on genuine practice management assistance.
“We don’t make rash decisions from a practice management perspective because it’s going to make more money for the dealer group.”
But if these planners are so successful in their own right, why join a dealer group?
“They like the ability to be in a network, to share and communicate ideas. Before we launched as a national dealer group, we were a practice in the industry, and the biggest thing we found was that we lost a lot of contacts in the industry, we didn’t have people to bounce things off,” Wise says.
When it comes to areas such as remuneration, FPSA is strictly hands-off — with planners determining whether they operate on a fee or commission basis.
“We also have a very broad recommended list and certainly let the planners get involved in investment and new products,” Wise says.
FPSA is looking at some cross equity ownership opportunities with its members, and has a few prospective practices it is planning to bring on board in the next few months.
The group also launched a wholesale wrap platform in June, providing low-cost access for advisers.
But the focus is really on consolidation, Wise says, with an ultimate target of 30 planners in the group.
“We want to keep it very boutique, so we can give our planners a lot of time. We don’t want to have 500 planners on board because we can’t give them the level of service.”
“We haven’t lost any planners in three years, so we’re really going to keep doing what we have been doing.”
