It was hard for Tim Steele to leave AMP Horizons – a business he developed as part of the group – but he tells Money Management he is excited about the opportunity to lead ipac.
When Tim Steele decided to head up AMP-owned dealer group ipac, he had to say goodbye to what was, in a sense, his baby – AMP Horizons Academy.
Steele started his career in small-to-medium business consulting and has decided to take his start-up business to the United States at a tender age of 24.
“My risk tolerance then was much different than it is now,” he joked.
He made a move with his now wife and a couple of employees and started consulting to accounting firms in the US.
There, he spent seven years working closely with large accounting and financial planning firms on their value proposition for financial advisers.
Once his twins were born in 2007, he said it was time to move back to Sydney.
“A friend of mine, who knew AMP, suggested that they’d be a good company for me to connect with,” Steele told Money Management.
“I left [Australia] when I was so young and I didn’t know whether my skills and experience would be relevant and transferrable into the Australian market.”
He wrote to the then managing director of AMP Financial Services Craig Dunn.
“Three of four months later AMP decided to create Horizons Academy.
“I had stayed in touch with them throughout that period of time and they offered me the opportunity to return to Australia to head up Horizons.
“I was delighted to lead a business that was a start-up inside a large group like AMP, which appealed to my personality.”
Horizons, now headed by Amelia Constantinidis, offers a number of financial planning courses and an avenue for aspiring advisers to eventually join the AMP group.
Steele built the team from scratch and is leaving a robust entity behind.
“I spent five years at Horizons which was wonderfully rewarding and one of the highlights of my life,” Steele said.
“It broke my heart to leave the people that you care for behind; I had great emotional attachment to Horizons and the people that are part of it.”
As managing director of ipac, Steele is planning to chase some client segments that were previously not serviced by the business, such as the accumulator market.
Tapping into new segments
Steele said ipac had reviewed its business and identified a number of client segments it does not actively support or serve today, such as affluent professionals and young families.
“The accumulator segment is the most significant segment where we’re looking to try and build capability and advice offering to be able to support it,” Steele said. “That includes debt, risk and a low-cost super offering.”
Traditionally, risk was not an area the dealer group was focused on. Because of the demographics of ipac’s clients – pre-retirees and retirees – there is not the same need for risk insurance, Steele said.
Ipac refers its clients’ risk needs to a partner firm called Australian Financial Risk Management.
“It is one of the areas that we need to build,” Steele said. “We certainly need to build a very compelling advice offer to attract the segment which we don’t actively support or serve today.”
Utilising behavioural economics
ipac is engaging with behavioural finance researchers based in the United States to better understand its client base and build a so-called ‘next generation’ advice model.
Steele said the dealer group was providing specific training for its advisers on how to identify and deal with different types of clients and client segments.
“In many cases, whilst [clients] are rational people, they behave irrationally when it comes to making decisions about their financial affairs,” Steele said.
“There’s a lot of training that we provide to advisers to increase their understanding of the different types of clients that we’ve had the opportunity to work with and how they might need to adjust their approach or style to ensure it’s a really engaging experience for the client,” Steele said.
The research would ensure the group’s understanding of client behaviour was current, he said.
“Behavioural finance is at the core of the academic rigour and research that underpins some of the assumptions that we’ve made in continuing to refine the way in which we engage with clients and the way in which we deliver advice to clients,” Steele said.
As part of a broader strategy, the group is actively working with a few of the so-called “micro client segments”.
“The family law is a relatively new area for us where we’re building relationships with law firms across the country to be able to support their clients who might have a settlement as a result of divorce and then we will help them plan and use those funds to support their lives and families,” Steele added.
“Family law is an area of significant opportunity and demographically, aged care is very significant.”
