In 1995, the directors of the Queensland-based stockbroking company Wilson HTM sat down to their first strategy meeting.
The event was history in the making, not only because it was the first strategy meeting since the business was established 100 years earlier, but perhaps more importantly, because it gave the business a completely new direction and focus.
The outcome of this meeting also created a legacy for the way Wilson HTM would embrace change in the future.
Up until this point, the business had carved a name for itself as a provider of stockbroking services, with various family groups joining the business over the years.
However, in the early 1990s, it seemed the future of stockbroking was under threat, as more players were entering the business offering e-trade services at discount commission rates.
This trend, along with the stockmarket crash in 1987, made many stockbroking firms question their future success in an industry where margins were being squeezed and services rationalised.
This was precisely the business environment that prompted Wilson HTM’s first ever strategy meeting.
“The directors basically got around one table and said, ‘We’ve got to do something different. What’s it going to be?’,” Wilson HTM’s director of wealth management and non-executive director of its funds management group, Tim Samway says.
“In this first strategy session, it was realised broking was not going to be a great business in 10 years time.”
Samway says the directors realised that clients with under $500,000 to invest go to financial planners, while the wealthy go to brokers. This means there were terrific opportunities for the business to target investors with $100,000 to $150,000.
Today, Wilson HTM retail provides wealth creating, financial planning, estate planning, risk management and stockbroking services.
The name Wilson HTM was formed in 1989, the result of the merger between the firm Wilson and Co and the firm Holmes, Tynan and McCarthy.
While in 1995 the business employed 55 staff, today it employs some 230 staff across Queensland, NSW and Victoria, with approximately 30 planning staff and 70 stockbrokers.
“We tend to be like a lot of financial planning businesses, with stockbroking added on,” Samway says.
Since 1998 in particular, Wilson HTM has worked hard to beef up its research area to develop intellectual property for the business. This has helped it create the largest mid-cap team in Australia, with 15 analysts working in the area that focuses on both mid to small-cap stock selection.
Using the resources of Wilson HTM Asset Management, the retail side of the business is able to offer clients access to both Individually Managed Accounts (IMAs) and managed funds.
Created through the business’ wholesale funds management area, Wilson has five funds, including Australian equities, fixed interest, international shares, monthly income fund and a special situations fund that follows Wilson HTM’s floats and recommendations.
The bulk of Wilson’s money comes from its IMAs, with $479 million currently invested. These IMAs are for clients with over $250,000 in the Australian equities portfolios.
Established in 1996, Samway says Wilson HTM was the first business in Australia to tailor and manage portfolios for clients’ needs.
“That sort of service is something financial planners have not come to terms with,” he says.
Samway says in providing IMAs for its clients, the business is effectively backing its investment philosophy and approach.
“We have a unique focus on the investment process and in achieving wealth for our customers. We are taking responsibility for performance,” he says.
“And the reason we are comfortable with that, is that we don’t believe a lot of intellectual rigour is applied to investing by financial planning practices. We have a unique focus on investments and achieving wealth for customers. We know how to make money and how to apply that,” Samway says.
The other way Wilson HTM stands behind its investment philosophy is the way it has designed its remuneration structure for its planners.
While remuneration is a combination of salary and commissions, Wilson HTM has introduced key performance indicators, which varies the commissions received by its advisers. While this strategy has been tested in the wealth management group for the past year, this remuneration structure is yet to be implemented across the business.
Based on the feedback from customer surveys, key performance indicators are deduced for each adviser depending on the customer service given to a client.
To encourage clients to reply to these surveys, Wilson HTM has offered clocks and tickets to Gold Class cinema to people who complete the survey.
Over the past year, Wilson HTM has also varied its advisers’ remuneration with the investment performance of clients’ portfolios.
“Advisers who put investments into funds that performed badly are effectively penalised. It is part of a process of alignment with the interests of the client,” Samway says.
Currently, 38 of Wilson HTM’s planners and stockbrokers have equity in the business, an opportunity that is treated as a reward for those people who believe in the business as a whole.
According to Samway, the business no longer makes a distinction between the money that comes in via stockbroking and money made from financial planning services because the wealth management group integrates these two services.
However, this integration does not mean all financial planners are stockbrokers and vice versa. Rather, while encouraging stockbrokers to participate in financial planning training, Wilson HTM does not require the two to be interchangeable.
“Stockbrokers originally didn’t like the idea of financial planning. They knew their clients but never asked them their salary, insurance or superannuation fund,” Samway says.
However, with education and PS 146 compliance, Samway says stockbrokers are now willing to talk about these issues with their clients. The signing of a dealer-to-dealer relationship with Securitor in June this year has facilitated the delivery of regular training.
Also, as an extension to this relationship, Securitor will role out Asgard’s platform to its financial planners, which includes its e-wrap and master trust service. Samway says while these services will also be made available to its planners, it has no intention to badge any products.
“It is just for clients who want brand names,” he says.
Wilson HTM’s clients are typically diverse, with the majority over 45 years old and interested in regularly contributing to a share portfolio.
While it is true that public floats have facilitated greater share ownership across Australia, Samway says many people subscribed to these share offerings and never did another thing.
He says the greatest impact on Wilson HTM’s stockbroking business was the privatisation of Suncorp Metway, increasing share ownership particularly in Queensland.
Wilson HTM still relies on personal networking to attract clients to the business, however, it does gain some larger exposure through general marketing.
The business also sponsors the Australian Chamber Orchestra and has struck up some unique relationships, including one with the Australian Medical Association in Queensland where Wilson HTM sponsors their conferences, providing some marketing opportunities with its membership.
Existing broking firms are competitors for Wilson HTM, however, because it hand-holds its clients, Samway says the business does not have a lot of head-to-head competition.
Over the next year, the business is seeking to develop more financial planning opportunities in Sydney and Melbourne and is currently looking at acquiring suitable financial planning businesses.
